Creating a budget

A budget will assist you in having a good understanding of your monthly income and expenses.

Before you start

  • Have the following handy when you are preparing to draft your budget:
  • Your salary slip. You will need to get your net monthly income from here.
  • Your bank statements. You can use your bank statement to easily record all your monthly debit orders.
  • Use this to list your monthly expenses.
  • Remember that your monthly bank charges and any interest you might pay needs to be recorded as a monthly expense.
  • Your credit card(s) statement(s). You can take down your expenses from your statement.

Putting your budget together

You can download our budget tool here.

  • Record your monthly income.
  • Record all your expenses.
  • Start with your debit orders first as majority of the debit orders will remain the same month to month
  • Record all your other monthly obligations that you pay manually such as your rent, water and electricity, your children’s extramural activities etc.
  • Now record all your expenses of things you buy monthly such as groceries, airtime, your entertainment expenses, and your clothes.​
  • You will then be able to see the monthly surplus (if your expenses are less than your monthly income) or your monthly deficit (If your expenses are more than your monthly income).

Remember to include:

  • Those expenses that occur once a year e.g., car license renewals, birthdays, holidays, and subscriptions.
  • Things you pay cash for e.g., garden service, domestic and donations.

How to balance your budget

After you have completed your budget, you will have either a budget surplus or a budget deficit.

If you have a monthly deficit

  • Consider reducing some of your expenses such as entertainment, take-away and items you consider to be luxury items.
  • Review your debit orders and consider reviewing some of your contracts such as cell phone and insurances.

Now that you have done this, redraft your budget to see if you balance or have moved into a budget surplus. Don’t despair if you can’t manage to correct the deficiency immediately. Preserve until your budget moves from a deficit to a surplus. 

If you have a monthly surplus

If you have a monthly surplus, it means you have your expenses under control and you can start saving.

Consider the following:

  • Ensure that you have created an emergency fund.

Consult with a CFP® professional to assist you in creating a financial plan to achieve your financial goals.

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