The value of a monthly budget
A monthly budget can help you to decide how to spend your money, plan for your future, pay off existing debt, plan future debt, and save a few rand each month by reducing wasteful and impulsive purchases. To create your monthly budget:
- Categorize your expenses.When you begin setting up a monthly budget, start with big categories before breaking your budget down into smaller expense categories.
- From your list of expenses, develop two separate budget lists, one for essentials and the other for extras.Within each general budget category, some items are essential (debt or rent payment, electric bill, and groceries); others are extra (new furniture, gift etc).
- Look through these lists to find flexible budget expenses where you can cut back.Put a star next to these flexible items so you can identify them.
- Estimate what you spend.Go through receipts or records you’ve kept over the past few months so you can track how much you actually spend on both essentials and extras. If you have a bank account, check your bank statements.
- Add up your budget essentials list and the extras list separately.By keeping the lists separate, you can make cuts more easily, if you need to.
- Subtract the essentials total from your monthly income and, if you have money left over, subtract the extras total from that amount.If you still have money left over, great! Look into a savings or an investing plan.
- If your extras list takes you into negative numbers, start looking for places to cut back.You can also trim from the extras list to put more money toward debt repayment if that’s a high priority in your financial picture.
Monthly budget
| Income | Budgeted | Actual |
| Salary | ||
| Interest income | ||
| Other income | ||
| Expenses | ||
| Home loan / Rent | ||
| Property rates / townhouse levies | ||
| Credit card payments | ||
| Vehicle financing / Transport costs | ||
| Hire purchase agreements | ||
| Insurance | ||
| Life assurance | ||
| Retirement annuities | ||
| Savings, for example, unit trusts, society schemes, fixed deposits | ||
| School / Other educational costs | ||
| Domestic worker’s wages | ||
| Retail card accounts | ||
| Savings for emergencies / Stokvel | ||
| Sub total | ||
| Variable monthly expenses | ||
| Water and electricity | ||
| Telephone (cellphone included) | ||
| Food | ||
| Petrol / Vehicle maintenance | ||
| Medical expenses | ||
| Household | ||
| Clothing | ||
| Entertainment | ||
| Sub total | ||
Total expenditure | ||
| Total expenses |
See the following sources and websites for more information:
