Got your paycheck today? Cool, let us spend the next 10 minutes planning your budget for this month. Try this once and live the whole month stress free.
To make it easy for you, let us say your salary is Rs 40000. We will first lay out all the expenses do some savings and plan accordingly
The Monthly Expenses
These are the first deductions you need to make from your paycheck. They will include:
- House Rent
- Electricity Bill
- Internet Bill
- Other Monthly Bills
Now these are the 4 most important monthly expenses you will have to pay every month but there will be certainly more. So, start a list of yourself, in 4-5 months, you will have a list of all your monthly expenses and a rough estimation of how much you have to save from it.
The Unplanned Expenses
Now there are certain expenses, which are never counted as expenses. But nonetheless, you always end up spending some part of your paycheck on it.
For example, in my case it is around Rs 4000-Rs 5000, that is spent throughout the month and I am not sure where exactly and how much I spent these on. Some part may in medicine or cabs.. But whatever, you get the idea, this is the second expense category you need to put some cash in.
The Emergency Expenses
The most important money lesson you will learn is: you will often never have money when you most require it. It is because of our short sighted planning of our expenses.
You never know when a family or medical emergency is going to emerge out against you. So, there should be some emergency fund in place to help you with these hard times. Normally it is sufficient to have 2x of your monthly salary plus medical and life insurances in place. These 2 things will guard you whole your life. If you have both these covered, then you neednot put money in this category.
But make sure you buy a medical insurance at least 2x your annual salary
Savings For Future
Last but not the least, you need to save money for the future. There will be many occasions in future where you will require lots of money. So,be sure you have saved enough when moments like these come into your life. These moments can be your old age, your marriage, your child’s education, etc.
Well, congrats. You have arrived at the final step of paycheck planning. If by now, you still have some money left, it is all yours to spend on luxuries. Because we have already taken care of all our major expenses this month along with unprepared expenses as well. So, I guess we can move forward and spend it any way we like
Thank you 🙂