Budgeting your Annual Spending

Budgeting your annual spending is a very difficult task that needs a highly disciplined mind as well as organization. This is to say that in other to be successful when budgeting your expenses for the year you need to culture yourself in other to avoid unnecessary spending and cut down on those things that have being taking most of your money before. This simple instruction will show you how to use your money wisely in other to have reserve for your unplanned expanses.

The first step in budgeting your annual spending, is to realize how much you receive on a monthly basis, when this is known, you will now know how and when to spend your money

The next thing you have to do is to list and write down all your expenses, that is everything you spend your money on every month. These things may be your bills, rent, feeding, transportation etc. With the knowledge of this, it is advisable to see how you can save a little from your monthly salary after you have removed all those expenses mentioned above.

With this in mind, try as much as possible to cut down unnecessary expenses; that is expenses that you do not plan for. For example if you use to take two bottles of alcohol every day, try to reduce it to one, by so doing, you are biting down on your expenses and you are saving the money you would have spent on the other bottle of alcohol. Reocrd your expenses on a daily basis because this will help by informing you how you spend your money.

When you have successfully listed down all your expenses for a month; including planned and unplanned, try to subtract them from your monthly income. The result you get is the money you are expected to save for a month. To get how much you are to realize in a year, multiply that monthly result with twelve months, that is the result you realized times twelve. This will give you the money you have as your savings.

Cultivate the habit of saving ten percent of your income every month because this can help to a great deal, cater for your festive and holiday season. For example if your monthly income is $2000, $20 is what you are expected to save. Now if this can be successfully done for twelve months, you have saved $240 in a whole year.