Imagine a situation in your life: your account gets credited a particular amount of salary/income every month and it gets spent within a few days and you don’t even know where that money went. It’s because you don’t have a monthly budget planner in place.
I too was in the same place a few years ago but I changed my financial freedom journey when I learned the art of how to make a monthly budget. And being a money coach for women entrepreneurs in India, I see there are so many ways they need to be financially empowered and it starts with the skill of making a monthly budget.
I strongly believe that for Indian women, budgeting can be an empowering tool that helps control spending, save for future goals, and reduce financial stress.
Though there are many monthly budget templates available online, I’ve demonstrated a step-by-step guide about how to plan a monthly budget so that you know the nitty-gritty of it.
Before we dive deep into the details of a monthly budget planner, let’s get an understanding of some basic things that will make things easier for you.
What is a Monthly Budget?
Simply put, a monthly budget is a financial plan that includes your income and expenses over a month. By looking at your income and expenses, you can plan the allocation of your money to various categories like savings, necessities, and discretionary spending, ensuring that you live within your means and work towards your financial goals.
Why Budgeting is Important?
When you start tracking your finances with a proper monthly budget planner, you will see so many benefits that will help you change your financial trajectory. Here are some of the benefits of following a simple monthly budget template:
Financial Control:
Having a monthly budget planner helps you get a 360-degree view of where your money is going and what are the areas where you are spending more.
Savings:
Another benefit that you will realize once you learn how to make a monthly budget is that you will be able to save enough for your future needs and emergencies like medical or financial.
Debt Management:
Another benefit of having a monthly budget planner is that it helps you in planning your debt repayment strategies effectively, driving you toward the path of financial freedom.
Goal Achievement:
A monthly budget planner also helps you in setting realistic financial goals, be it short-term or long-term.
Reduced Stress:
Last but not least, when you have a monthly budget planner in place, it helps you minimize your financial anxiety by providing a clear financial roadmap.
How to Make a Monthly Budget – Step-by-Step Process
Now that you know what is monthly budget and what are its benefits, let’s take a look at how you can design your own monthly budget planner.
Determine Your Financial Goals
Before you make your monthly budget, you need to set your financial goals. Is it getting debt-free? Is it saving and investing more? Or is it about having a good mixture of comfort, convenience, and savings?
When you have a clearly determined financial goal in your life, it will become super smooth for you to plan your budget accordingly.
Calculate Your Monthly Income
Once you are done with goal setting, you need to check what’s your monthly income, and to do so, you can note down all the various income sources that you may have like:
Salary: Regular monthly income from employment.
Freelance Work: Earnings from part-time or freelance projects.
Investments: Returns from investments like dividends or interest.
Other Sources: Any additional income like rental income, bonuses, or gifts.
In case you have an irregular income, you can take a look at your last six or twelve month’s income and calculate an average monthly income based on your past earnings.
Track Your Monthly Expenses
The next step in making a monthly budget is tracking your expenses. This will help you understand your spending patterns and identify areas for improvement.
Here are the various categories of expenses you need to track for your monthly budget planner:
Fixed vs Variable Expenses
This includes regular, recurring expenses like rent (₹15,000), EMI (₹10,000), or insurance premiums (₹2,000).
Variable Expenses:
These include fluctuating monthly expenses such as groceries (₹5,000), utilities (₹3,000), and entertainment (₹2,000).
Monthly Budget Example
Once you have created a monthly budget, here’s what it may look like.
| Category | Budgeted Amount (₹) |
| Income | 60,000 |
| Rent | 15,000 |
| 10,000 | |
| Groceries | 5,000 |
| Utilities | 3,000 |
| Insurance | 2,000 |
| Savings | 10,000 |
| Discretionary Spending | 5,000 |
| Miscellaneous | 5,000 |
Some additional tips to keep in mind while planning a monthly budget planner
As you now know how to make your monthly budget planner, here are some tips that I would like to give based on my 23 years as banking and wealth management expert advisor:
Build an Emergency Fund
The first goal you should have while setting your monthly budget planner is to save at least 3-6 months’ worth of expenses for emergencies. So if your expenses are 1L rupees a month, you should aim to save at least 3L or 6L to stand any adversity in life without getting broke.
Avoid Debt
If you have multiple debts, you should first pay off the ones that have the highest interest. You can check this by either getting in touch with your loan provider or checking the terms of the loan in the agreement.
Invest Wisely
Investing money is a learned art. Don’t copy the others but judge your own risk capacity and make your investment choices accordingly. Plus, diversify your portfolio to minimize your risks. Always consult a financial advisor before investing.
Make Regular Modifications
Making a monthly budget planner is not just a one-time thing, You will need to update it regularly as your monthly income and expenses keep changing. And based on these changes, you can also re-evaluate your financial priorities.
Discuss Your Budget and Financial Freedom Plan with Money Mindset and Management Coach for Women Entrepreneurs in India
If you are a women entrepreneur reading this blog, let me tell you that you have ended up in the right place to be in charge of your finances. I’m Meena Shriram, a money and life coach for women entrepreneurs and I have helped many women like you to take charge of their finances and get on the track of financial freedom.
Being in the wealth management industry for 23 years, I’ve handled portfolios of many High Networth Individuals (HNIs) with a range of 600 corers.
If you would like to get guidance on how you can manifest and manage more money in your life, feel free to send me a DM on my Instagram account MoneyCoach_Meena.