Part 3/7:
By inputting all expenses on a monthly basis, the author ensures an accurate representation of financial activity, allowing for more informed decision-making.
Monthly Income and Budget Allocation
Each month starts with a paycheck of £2,800. The first essential expense is rent, which totals £850. The author then automates a transfer of £1,000 to their investment account. This proactive step reduces the disposable income available for the month—leaving them with £950 to allocate across other necessary expenditures.
The budgeting process employs a method where fixed costs are calculated and compared against monthly income. Fixed costs, which are mostly unavoidable expenses, are carefully monitored and include items such as subscriptions and average travel costs.