What you should budget for in your personal finance

Our income will always be lesser than we can spend. This is considering that there are always items on our radar that we would wish to have if not because of limited funds. Most people can hardly satisfy their needs, let alone their wants. However, even those that can comfortably satisfy their needs, will never be able to fully satisfy their wants. This is why you must budget your personal finance efficiently so that your income can be useful for you in the short and long term. Here are some things you should budget for in your personal finance.

satisfy their needs, let alone their wants


You might expect the list to start with your day-to-day expenses, which are easily the most important. However, if it starts with expenses, it might as well end with expenses as you might not have enough to save by the time you are through with the expenses. This is why you should start with your savings. Putting aside some money in your saving account is important because it will go a long way to ensure you have money to use in times of emergency. You can read about the best platforms to open a savings account on USReviews.

Even more important is that the money would continue to increase when you are consistent with your savings. The implication is that even if you never have an emergency, by the time you have to retire, you will have some substantial amount in your savings account that can come in handy. You could decide to start spending off it directly or if you are still strong enough, you could start up a business from your savings.

You should try to save at least 10 percent of your income monthly. Depending on how much you earn, how much your expenses are, how ambitious you are, and how prudent you can be with money, you could save up to 30 percent of your income monthly. Having a percentage as opposed to a fixed figure makes it easier to stick to it, ensures that your savings grow as your income grows, and makes it easier for you to remove your savings first before other things.


The next thing you might want to budget for is investments. It is important to invest apart from savings. In most cases, your savings will only accrue a little amount of interest over time that might be insignificant or that inflation might have swallowed up. The implication is that the value of your savings does not increase. This is where investment comes in. Investing a certain percentage of your income on the right investments could have your capital multiplying by 100s or thousands within the next 10 to 40 years. That could make you wealthy.

However, the reason why you don’t just invest all your savings is that you might not be able to access them during an emergency (they should not be removed because of emergencies in the first place) and investments are risky (you could lose your capital. You should strive to invest at least 10 percent of your income monthly.


We have several expenses that range from groceries, food, clothing, shelter, utility bills, repairs, phones, phone bills, transportation, insurance, and electronics among others. The remaining maximum of 80 percent of your income will go into purchasing these things that you need to live a valuable life at the moment. You don’t want to stop living today because of the future, even though it is worth the sacrifice. Hence, once you remove your savings and your investments, you should plan your other expenses to fit within the remainder while also leaving some amount for miscellaneous expenses that could suddenly come up.