It is a popular ideology that money earned can never be enough to meet up our needs.
Everyone was taught that our “wants” will always outweigh our needs and our finances, hence the need for a scale of preference which I will like to replace with an “intentional budget”.
Contrary to popular opinion, it is possible to live a comfortable life based on whatever amount we earn.
An intentional budget will ensure that no income is spent without being budgeted, no matter how little and irrespective of the source.
Budget formulas are not standardized, you can create a budget based on what you earn, and what expenses you make.
However, bear in mind that certain things must reflect in your budget.
Below is a budget sample you may want to consider:
10% – Religious (Based on beliefs and requirements)
10% – short term savings
10% – Long term savings and investment
60% – Daily activities and expenditures
10% – Miscallaneous
- Short term savings cover for expenses like house rent, and bills that are paid over a period of time.
This implies that if you earn roughly over
N100, 000 a month, the house you live in should not cost more than N 120, 000 per annum, unless you make up your mind to cut down on your miscellaneous and daily expenses. This will bring us to a point which emphasizes that we live within our means.
- Long term savings should only be used for investment purposes, and the returns should be budgeted again.
Unless in very dire emergency situations, resist the urge to tamper with this part of your income.
- Daily activities vary from person to person. This means that we don’t spend equally.
Therefore, you will have to itemize a sub budget under this.
Include everything you spend money on; such as transport fares (you can make an estimate of this), feeding, data, the electricity bill, etc.
If you are working on a project that requires money, you may have to adjust your daily living to fit into the budget.
This part of the budget is what I call “the flexible expense” because it can be adjusted to suit our needs.
For instance, if you’ll eat more, you may have to walk a longer distance.
- Miscellaneous expenses are important to enable us take care of ourselves and people around us. You can save up for a shoe, a dress, a bag or an outing under this expense.
And of course, you may not need to touch it; depending on your needs at the moment.
Very importantly, we must learn to live and plan within our means. Plan and raise a family while considering what you earn.
We must avoid borrowing; it eats up the money even before it arrives.
Never spend money with the hope of replacing it, that’s like borrowing from yourself.
Learn to say things like “I cannot afford this yet” or “My budget doesn’t cover this”.
The budget is called an intentional one for a reason, because unless you take steps by practicing, it may never benefit you.
That income can be enough. Budget it.
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