Budgeting and Money Management

What is a Budget

A budget is a financial plan that shows where your money is coming from, how much is there and where it's all going. It is a plan for saving, spending and borrowing. It allows you to see your income against your expenses so you can make informed financial decisions.

Creating a budget answers 2 key questions:

  1. Do I have more money going out than coming in?
  2. What can I afford to spend?

Why should I make a budget?

The main reason to create a budget is to keep your finances under control by tracking how much money you're spending and where it goes.

By creating a budget, you will gain a new perspective on your finances, potentially prevent yourself from making bad financial decisions, and in turn, start saving more money.

If you don't have a solid understanding of your personal financial situation, you're liable to be spending too much money in general. This might lead to buying things which you cannot afford. Keeping track of what you are spending your money on can help you to prioritise the essentials.

How to make a budget - Some tips: 

  • Use weekly or monthly amounts - don't mix them up!
  • Make sure amounts are realistic
  • Make a rough copy first
  • Don't forget one-off or annual expenditure
  • If there are any loan repayments, include these
  • Include an amount for emergencies and things like Christmas and Birthdays
  • Re-do a budget when things change, for example; if you change your job or end work, if you finish paying a fine or debt, or if you take out a loan