| The first step in money management is to decide | | | | and equipment or an Internet connection for |
| how much you can spend. This is relatively easy - | | | | workers at home. These allow a continued |
| until you realize that the money gets spent | | | | income, so being able to pay these is of |
| "somehow". To avoid this "somehow" and to | | | | paramount importance. |
| actually lower your spending, the most crucial | | | | 7. Professional fees - lawyers, accountants, debt |
| thing is to prioritize. | | | | counselors and so on. |
| Figure out which expenses are critical, which are | | | | Out of the essential expenses, some need to be |
| essential, which are compulsory, which can be | | | | paid annually, some quarterly, some monthly, |
| postponed and which are purely up to your own | | | | perhaps some even weekly. In order to calculate |
| will. Here is a rough plan that you can use to | | | | how much to set aside every month for these, |
| categorize your expenses. | | | | go by the following rule - |
| The most essential expenses for anyone are | | | | 1. Divide annual expenses by 12 |
| under the heads of food, clothing, health and | | | | 2. Divide quarterly expenses by 4 |
| shelter - | | | | 3. Keep monthly expenses as they are |
| 1. House related expenses - rent, repair, | | | | 4. Multiply weekly wages by 52 and then divide by |
| maintenance, association fees, utility bills | | | | 12, i.e. multiply weekly wages by 4.33. |
| 2. Medical or health-related expenses - insurance, | | | | A thumb rule that can help to stay prepared for |
| average spending, fees for yoga or gym, food | | | | emergencies is to set aside a month's budget per |
| supplements | | | | annum. Always keep this amount handy in your |
| 3. Food -include baby food as an essential, but | | | | savings account, and promptly take measures to |
| look for substitutes for canned pet food, energy | | | | replace it if it gets spent. DO NOT let your regular |
| drinks or frozen meals | | | | budget encroach into this amount no matter what |
| 4. Clothing - warm clothes for winter, waterproof | | | | happens. |
| clothing for rainy areas and about five sets of | | | | One thing that people perpetually forget while |
| summer clothing is all that you can count as | | | | budgeting is to allow some room for error. Allow |
| "essential" for one person. Your budget may allow | | | | a certain amount of money every month for |
| for more than this, though, especially if you | | | | non-essential expenses. Buying books, gifts, |
| frequent thrift stores and yard sales or circulate | | | | inexpensive jewelry or makeup, or even eating |
| hand-me-downs among neighbors and family. | | | | out once in a while can take away the stress of |
| 5. Personal care - switching to generic brands can | | | | constantly watching the budget. If you will, it |
| drastically cut down spending on personal care | | | | works like a reward system - save so much, |
| items. For DIY enthusiasts, there are a lot of | | | | enjoy a limited splurge later. By keeping yourself |
| options readily available in the kitchen that can be | | | | happier, you also end up healthier and less prone |
| used very economically for personal care and | | | | to binge eating, binge spending or such excesses. |
| cosmetic needs. | | | | So definitely do not forget to put yourself on the |
| 6. Expenses incurred for earning an income - | | | | list while preparing a budget for your household! |
| transportation and office lunches for office goers, | | | | |