![]() ![]() Long-term savings include the money you set aside for: Necessities include your monthly living expenses, such as: In this rule, 50% of your income goes to necessities, 20% to long-term savings, and 30% to lifestyle choices. This approach is simple, can have a big impact on your budget, and is a useful place to start if you are finding it challenging to allocate a total spend to the categories in your budget. Using the 50/20/30 rule to divide up your incomeĪnother strategy you may want to work towards is the 50/20/30 rule. Ultimately, creating a realistic budget, and sticking to it, enables you to put a solid financial plan in place now and for the future. Having a budget, and knowing where you want to be financially, can keep you focused and motivated to stay on track. Keeping it accurate and up to date can help you monitor your monthly expenditure, achieve financial stability, and plan for any other future financial goals that may arise.Ī budget can help you save for a holiday, settle an outstanding debt, put together an emergency fund or get through the month without a negative balance. Your budget is a living document that will change according to your needs and wants. Budgeting helps you keep to your financial goals This is an easy strategy to implement and can have a significant impact on your finances. Once you’ve uncovered your spending habits, you can bring these areas under control and keep a sharp eye on how much you spend per month in each of these categories. Impulse purchases of fashion or gadgets.The average person overindulges in three main categories, namely: For example, keeping a record of your petrol bill could be enlightening but if it doesn’t alter your spending behaviour, then there’s no point in tracking the expense. ![]() The end goal of budgeting is to track your expenses but you don’t need to account for every rand and cent. This can help you stay on top of your bills and monthly costs, plan to lower any current debt, as well as side-step any future debt, while also helping you to identify unnecessary expenses or any potential areas where you can save.ĭownload a budget template from the Internet to keep track of your monthly finances.īudgeting can help you to see the ‘big picture’, and whether you're spending more or less than what you can afford, and if there are any potential money challenges on the horizon giving you full control of your money situation. Setting up a budget gives you a clear idea of what’s coming in and going out of your account. Budgeting puts you in controlĪ good budget helps you prioritise your spending and stay on top of your monthly expenses as you decide how to use and save your money. Good personal budgeting can give you control as well as financial freedom and flexibility, among many other advantages. Financial talk show host and writer, Dave Ramsey, said it best: “A budget is telling your money where to go instead of wondering where it went.” And while many may associate budgeting with restrictions and limitations, it can be quite the opposite.Ĭreating a budget can help you determine whether you have enough money to do the things you need to do – and the things you want to do. Budgeting is a powerful tool to manage your money. ![]()
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