I was not good with personal money management, I spend every dime I make, regret it when I'm broke, and then resolve to save next time. But the same repeats itself over and over again. I had no choice but to enroll in a personal money management class online and that changed my spending habits. By estimation, I make at least #60,000(naira) in a month and I was able to list my expenses into three categories, 1. The fixed expenses 2. The volatile expenses and 3. The discretionary expenses. The fixed expenses are expenses like house rent, utility bills, etc. They are expenses that must be paid and most times have a fixed amount and duration of payment. They are necessary monthly or yearly expenses. The volatile expenses unlike the fixed can change in price and duration, example is expenses for food, fuel, airtime, data, etc. While the discretionary are other expenses that are important but not necessarily, they are expenses done for our comfort and at our choice.. Example is money for buying clothes, shoes, vacation, outing, etc.
Having the knowledge of my income, the expenses which are most important down to the least, I have been able to make proper budgeting. Budgeting In Nigeria may be quite different from budgeting in other countries which have fixed expenses. Going through my financial history has helped me manage how well I spend and on things which I need and those which I want.
Since my income doesn't come monthly or weekly, I have drafted a means of meeting my goals. I make a budget from every withdrawal I make. I drafted a list containing things in accordance with priority at that time and made it a habit to spare 5% for savings. I only ensure that my expenses don't exceed my income, in order to avoid this from happening I cut down expenses from the discretionary expenses or volatile expenses. When it seems as if saving for a particular purpose would take a long time to achieve, I go for a loan and budget a certain percent of money from every withdrawal I make to cover up for the loan.
Budgeting is hard to do but understanding our income and fixed expenditure will help us make good use of our money. So each income that comes is divided into parts, each part allocated for a service in accordance to priority ensuring our expenditure isn't greater than our income.
