Having a budget is very important. The truth is, a lot of people (over 50 years of age) who suffer financial predicament are in that condition because they didn’t make wise financial decisions when they were younger. If you can create a highly effective budget for yourself and follow it consistently, you’ll have no such problems later in life.

What should you consider while creating a budget, and what can you do to ensure you stick to your budget as much as possible? First, you have to consider your monthly income, have a savings goal, quit spending mindlessly, and categorize your budget.


How much you earn at the end of the month plays a huge role in your budget plans because it is what you use to pay for your budget expenses. It is to your own benefit not to spend more than you earn in a month.

Make a list of your monthly income and have a specific number to work with.


  • Active income, eg salary and wages
  • Passive income, eg dividends, capital gains, and interests
  • Bonuses
  • Gifts
  • Child support

Be sure to add any other source of income to get your total income per month and be clear on how much money will go into your budget. Make sure that every income you consider as your budgeting goals are guaranteed. You don’t want to fall back on your rent payment because your best friend did not gift you with money on your birthday.


After you’ve made a reliable note of how much you’ll be expecting at the end of the month, then it’s time to start your budget plan on how to spend the money wisely. According to financial experts, the first thing you have to do with your money is to pay yourself first. This does not mean you should spend money on a luxurious pair of shoes you don’t really need. It means you should set money aside for your savings goals.


  • Retirement savings
  • Emergency funds
  • Investments
  • Vacations
  • IRA
  • College debt

If you’re wondering how much you should save per month, you can try the 50/30/20 saving strategy. It’s a confirmed proactive method of saving. Feel free to change the numbers to suit you.


Don’t expect to make any headway in your financial life if you don’t cut down on unnecessary expenses. This is hard, yes, but you have to make that sacrifice in order to actualize what you have budgeted for and achieve your dream of financial prosperity. There should be a clear distinction between your needs and wants. Try to spend money only because you need to and not because you want to.


  • Use public transportation
  • Cook your own food
  • Install LED or CFL bulbs
  • Lower the temperature of your hot water heater
  • Consolidate your student loan

It’s important you review your expenses and cut out expenses you’re sure you can do without.


Now, let’s get the budgeting proper. We’ve mentioned savings/paying yourself first. The next thing is to come up with an extensive plan for how best to spend the remaining money. Budgeting can be overwhelming at times and you’ll probably forget some things that may need financial attention.

That’s why a budget category list is important to help you with your budgeting.

Here is a complete list of budget categories applicable to everyone.

  • Savings
  • Housing
  • Food
  • Utilities
  • Personal effects
  • Transportation
  • Medicals
  • Gifts
  • Insurance
  • Charity
  • Entertainment
  • Household items
  • Education
  • Pet care
  • Childcare
  • Miscellaneous

Again, feel free to adjust the list to suit your needs.

What To Do With Your Extra Cash

If you’re able to follow through with your budget religiously, you’ll discover that you may have some money left every now and then. For instance, if you budgeted for medicals and you ended up not needing any medical attention, you’ll have some extra cash left by the end of the month. What should you do with this “extra cash”?

A certified financial planner is of the opinion that any extra cash should be added to one’s savings if there’s no tangible reason to spend it that is. There’s nothing wrong with getting what you want, but if you can practice delayed gratification, it will help you reach your financial goals even faster, don’t you think.

Share your thoughts with us in the comment section. we’ll really love to hear from you.

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