How to Budget Your Income for 2021?


The New Year has started and the pandemic continues. While a large number of people may have already started budgeting their personal finances in order to prepare for a possible financial depression, others may be just starting to feel the effects of the Covid-19 pandemic. Whichever the case, creating a budget and sticking to it is both an efficient way to create a financial safety net, as it is useful for those looking to save money.

There is no better time to create a monthly budget than at the start of the year, when most individuals reset their views on their financial progress. This having been said, we will look at how to create a proper budget for 2021 and we will also take into account the possible financial dangers that may await in the near future. Here is what you need to know:

Stick to the Budget No Matter What

Monthly budgets are only effective if you treat them with discipline. Once you decide how you will spend your money, it is important to not break the rules that you set for yourself unless there is a serious emergency that takes precedence over the budget. Furthermore, every time your income changes, you will have to reassess your expenses and other financial decisions.

Look at How You’ve Spent Money in the Previous Year

There is not winning formula when it comes to monthly expense budgets. Each individual is different and, as a result, each must come up with his own expense plan.

The best way to start is by looking at how you’ve spent money in the previous list. Get a sheet of paper and try to remember all of your biggest expenses from 2020. Once you finish this list, move on to the less expensive products or services that you might have purchased. Do this until you reach weekly expenses such as groceries, utility bills and various monthly subscriptions? At this point, you will have to look at the expenses that you’ve had during the last couple of weeks.

Keep in mind that the purpose of this step is to determine how you are currently spending your money and figure out which expenses are vital and which can be eliminated.

Create Your Budget with a Financial Buffer in Mind

It is likely that the job market and the economy in 2021 will be as variable as they were in 2020. As a result, you should consider creating a financial buffer that you will contribute to each month. This can be in the form of a savings account, a debit card that you will only use in case of serious emergencies, simply a paper envelop that you fill with cash.

Regardless of your choice, try to contribute to your buffer every month. This will give you a safety net to use if you are ever laid off from work or if your income is reduced to the point where paying your vital monthly expenses is difficult.

Consider Eliminating Some Creature Comforts

2021 is a year when most people should focus on saving money. In some cases, this may mean giving up various creature comforts that you may be currently paying. This includes Netflix subscriptions, online game subscriptions such as Nintendo Online or Xbox Live, and others. In other aspects of your monthly expenses, you should look for ways to pay for what you need. For example, if you do not use all the benefits included in your cell phone plan, switching to a more affordable one may be a good way to save money.

Keep in mind that most of the money that you save should go into your savings account or otherwise be left untouched. If no emergencies arise by the end of the year, you will at least have a larger budget for the winter holidays.


I don’t have any finance formal education, but I’ve spent my university years starting companies and then selling them to the highest bidder. While this may not seem like much, I’ve done it without ever using any sort of external financing. Over the years, I’ve become more experienced in terms of recognising affordable investment opportunities and turning them into successful businesses. While some of my ideas have failed, I’ve learned from my mistakes and now want to help others avoid them. I now have moved on to teaching and spend my time showing others that starting a company can be easy, provided that they have a clear objective and the right information.

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