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20 July 2020 | 4 min read

5 Things To Consider During Monthly Budget Planning.

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Monthly budget planning helps you control and track, how much money you spend, save, give, and invest. Additionally, budgeting enables you to stay financially organized, prepare for emergencies, steer clear of debt, and maintain focus on your long-term goals.

Some things take up a significant chunk of our income every month. You can become an excellent budget planner and can plan your finances all by yourself. Here we are going to list down five things that you should consider during monthly budget planning, for overall financial well-being.

1. Rent/Home Loan EMI

Include rent and EMI in budget

The first and most significant fixed expense to consider is your rent or home loan EMIs if you have your own house. Be sure that you are allocating a portion of your monthly income to paying rent or EMIs and other associated living expenses, electricity, and maintenance.

Want to buy a house? Know how to get a home loan.

2. Irregular Expenses And Emergency Fund

Emergency funds in budget

Life is unpredictable. It’s good to be prepared for uncertain things. It’s challenging to budget for such things because you won’t know about them in advance, but you should always be ready for them. Irregular expenses can sometimes shred your monthly budget, so try and set aside money for them even if it’s only a one-time thing.

It’s possible that you won’t be perfect every month and that’s okay. Because we are not a money bot…we are only human. There will be some months where you don’t spend anything on preferred leisure item, and there will be other months when you will go a bit out of control. And there will be times where you will have extra expenses that are not part of your monthly budget – such as a medical bill or travelling for a friend’s wedding. These are things we sometimes do not foresee.

This is why it is essential not to get too disturbed about you not following your budget correctly. After all, budgeting is not supposed to restrict you, and it should set you free by allowing you to know where your money goes and help you plan your spending better. Check out digibank’s investment calculator to determine how much fund you need to allocate monthly to achieve your financial goals.

3. Make A Food Budget

make a food budget

Food is a major part of your living expense. If you’ve moved out and had a new job, you might get carried away going to new restaurants and ordering appetizers, dinner, and drinks regularly.

Don’t fall for it; instead, set a monthly food budget. The majority of your budget should be put toward groceries, which will save you money in the long-term. You can buy groceries online here.

4. Wi-Fi And Subscriptions

Online subscriptions

Now binge-watching shows on OTT platforms has become an integral part of our lifestyle. Most of us go for yearly plans of these platforms, but some of you take the monthly plans. So, don’t forget to set allocate bucks for subscriptions to streaming services and the internet. Remember that you should also budget your phone recharges or bills.

5. Entertainment Expenses

Entertainment expenses

Think of it as a reward for budgeting things. You deserve to spend on fun things like going out clubbing, going to the movies, or attending concerts with friends once in a while {although with COVID-19, this might not be an issue but home entertainment costs, like home-parties, eating in, etc. might rise}

Though, it’s challenging to budget for entertainment because you might never know when you’re going to be doing something fun – especially applicable to people who prefer to be very spontaneous with their entertainment activities. The solution to this is when you’ve itemized all your necessary living expenses, determine how much money you have leftover, and set aside a decent portion of it for entertainment purposes. Even if you don’t use your entire entertainment budget each month, you’ll be able to put the extra cash away in savings or roll it over to the next month.

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