Use this tip to improve your budget – Personal Finance

by Thomas Lamay

Planning your budget based on planned monthly or weekly expenses requires a discipline that many people do not have. However, if you do, you may consider this planning a personal financial success.


When planning your budget in this way


You end up incurring unexpected expenses that may be due to a change in circumstances such as rent increases, new jobs, continual changes in the price of gas, and so on. At this point, you can consider personal loan online as a possible solution. Its easy application process makes it ideal. Moreover, its acceptance does not depend on the credit score.

Another possibility is to make your budget a bit more flexible. Instead of planning each expense separately, you’ll use ratios that will help your planning well. Here is how to write one of the most common ratios for personal finances: 50/20/30.


What does 50/20/30 mean?

What does 50/20/30 mean?

  • You should use 50% of your money for fixed costs that include your rent or mortgage, car and loan payments (if any), utilities (electricity, for example), cell phone bills, and others. All amounts, which are repeated monthly, are in this category.
  • The other 20% should be used for savings. This 20% segment also includes savings, investments and contribution to an “emergency fund”. Do not worry too much about the amount of these contributions. Setting aside 20% is what matters. No need for your emergency fund to cover all unforeseen events. You can also use it to pay off your personal loans online faster.
  • You will therefore use the last 30% of your net salary for “variable” expenses. But what do they consist of? All monthly variable expenses such as food, gas, travel and entertainment fall into this category. Basically, anything that does not include 50% or 20% categories should belong to it. This will give you the opportunity to modify your budget if necessary. For example, if the price of gas goes up, for example, you will fill up your gas tank and postpone a trip to a restaurant or movie theater to meet your 30% monthly plan.


This type of budget is planned in different ways

This type of budget is planned in different ways

One of them is to use an online tool that will allow you to track your expenses. You can also use different accounts or different forms of payment for each segment. For example, you use a chequing account to pay the 50% of fixed expenses. Then you deposit the amounts allocated to the 20% savings into a savings account. Finally, you use cash or a separate debit card for flexible expenses of 30%.

By planning this way, you can adjust your budget and you will not experience any frustration even if some of your expenses are different from month to month.