When people hear the words “monthly budget”, they often think it means that every cent earned and spent needs to be allocated and accounted for accordingly. This can seem a bit too “strict”, but that depends of course on what your financial goals are. There are people who, quite literally, know where every cent goes. Maybe you’re one of them. Or maybe you’d prefer to be more flexible with your monthly budget, but still have “free” money to spend each month.
The good news is, you can absolutely cater for this in your budget, as long as your essential or fixed financial obligations are factored in first.
Your fixed expenses are those which don’t tend to change each month. These include your rent or bond, utilities, car repayments, transport, school fees (if applicable), internet access and DSTV, and medical aid, life insurance and pension plan if you have. Once you’ve deducted these fixed costs from your net salary (your “take home salary after tax, PAYE etc.), you’ll be left with a certain amount of money which is then allocated towards your “variable” costs.
These are costs which fluctuate each month, such as groceries, your phone line or mobile phone, entertainment and clothing allowance. If you want to have “free money” to spend on anything else, then it should be grouped with these variable costs, once your regular variables have been catered for. If you find there isn’t anything significant left over once your fixed and variable costs are covered, then look to see where you can cut costs. If you’ve budgeted for a daily coffee, weekly dinner out, and monthly salon appointments, then you could free up a fair bit of money by cutting down on these.
Ready to free up some money? Take some time to reassess your original budget and see where you can make changes. Good luck!
