How to calculate month-to-month bills in your 2022 price range

Tracking expenses can help manage money smartly and ensure you have clear visibility and control over your finances. While the thought of the money you are spending may seem daunting at first, this is one of the first steps in setting a monthly budget that is right for you (i.e., one that covers your basic needs and needs without yourselves feeling like you are living a life of denial).

When you set your budget for 2022, Try a “conscious spending approach”. Instead of saving money, indulge yourself with the goodies that you really enjoy while lowering the cost of things that don’t improve your happiness or quality of life at the same time. This enables a sustainable approach to saving, investing and general money management and can lead to a more stable financial future.

This guide will show you how to calculate your spending according to the spending mindset.

What is the monthly expense?

So what is an effort? Essentially, an expense is anything that you spend money on – it’s the money that goes out and does not come in. This can include essential items like rent, utility bills, gasoline, groceries, childcare, and health insurance, as well as non-essential items like beauty treatments, entertainment (such as your Netflix subscription), and travel.

Since many expenses (like rent) are inherently charged on a monthly basis, most people create monthly budgets. This is also a manageable timeframe if you are hired and paid once or twice a month for a set period of time. A monthly budget is also easier to manage than an annual budget because you have a smaller amount of time to keep track of.

In order to keep your conscious spending plan even clearer and easier, it is best to divide it into four different categories:

• Fixed costs
• Investments
• savings
• Guilt-free spending

Examples of monthly fixed costs

Fixed costs are expenses that you cannot do without. These are the things you can’t get rid of because let’s face it, you can’t really live without them. While you can rarely completely reduce fixed costs, a review can help you figure out ways to reduce them. They could include:

• Housing costs such as rent, tenant insurance or mortgage payments
• Utilities such as electricity, gas and water
• Meals, including groceries, take-away and dining out
• Transport costs such as gasoline, car payments or public transport tickets
• Internet
• Cell phone bills
• Health insurance

Examples of investments as monthly expenses

By investing money in investments that grow, your money can keep up with inflation. While some investments perform best over the long term, there are too short term investment opportunities. Investments can include monthly payments in the following areas:

Examples of savings as monthly expenses

Savings can be used for various purposes. You can Set up under-savings accounts to divert money for these different needs, which makes it easier to keep track of things. Possible savings are additional money for:

• An emergency fund for unforeseen expenses, from health bills to computer repairs
• Large purchases, such as a down payment on a home or car
• Predictable expenses that are not paid for as often (e.g. car maintenance)

Examples of debt-free expenses as monthly expenses

Finally, when the above essentials are done, you will be left with no guilt-free spending. These are the things you buy that you don’t necessarily need to survive, but that will improve your quality of life and bring you joy. Examples could be:

• clothing
• to eat out
• journeys
• entertainment

How to calculate your monthly expenses

You don’t need an expensive personal finance manager or a complicated budget calculator to calculate your monthly expenses. Start by simply making a list of all the funds that are being spent each month – you can Use an app to track costs to keep track if you are not sure – or just look at your bank statements for the last three months. Then divide your expenses into the categories described above. All issues should fit on one of these labels.

Break down spending into budget categories to create a budget guideline. For example, some people adhere to the 50/20/30 rule, which says that 50% of monthly income (after tax) should be used for mandatory expenses, 20% for repaying debts (like student loans) or savings, and the remaining 30% should be used for everything else.

It is up to you to set a conscious spending ratio that suits your needs and lifestyle. After you’ve categorized your expenses and created a percentage budget, you can refine your spending. For example, let’s say your household income is $ 60,000 per year after tax. That’s $ 5,000 a month. Here’s how you can calculate your monthly spend based on the percentages for your four categories:

Overview of monthly expensesSpend Category Percentage Total Fixed Cost50% $ 2,500 Investments10% $ 500 Savings20% $ 1,000 Debt Free Spending20% $ 1,000

Remember that your spending plan can change over time. For example, you might get a promotion and make more money, which means it’s time to revise the categorization. Alternatively, new issues can arise, such as B. Personal loans each with their own interest rates, terms and conditions, and lender’s repayment plans. These points will change your budgeting template significantly.

Understand your own “money dials”

In determining how to structure your spending plan, it is helpful to understand your “money pickers”. Basically, these define why you spend money the way you do it. Ideally, you’ll be spending money on things that you really love – as you make more money, you can crank up on that kind of debt-free money. People can get excited about a variety of things, from spa treatments to luxury items to travel.

For example, if you’re passionate about health and fitness, your gym membership is a worthy monthly fee. If you have kids but the occasional romantic evening with your partner, paying for child maintenance like a babysitter is a great investment. The point is not to deny yourself the things you love. Learn more about money dials and how to determine your own.

A new way to financial success

Calculating your monthly expenses may seem daunting. However, it’s important to know that keeping track of your expenses doesn’t mean you suddenly have to stop spending on things that make you happy. You can still be financially savvy while making it expensive purchases. The key to success is to act in a structured manner and to become your own financial advisor, so to speak.

Instead of looking at money management as a means of limiting yourself, see it as a way to better organize your money so you can get the most of it. It can also eliminate what is possible Fears related to money – which make conscious spending even more difficult. A critical step in managing your money smartly is being open about it. Find out how to do spend conscious money Work for you