Do you know where your money goes? Without a budget, it is difficult to keep control of your finances. Here are five tips to help you set up a budget and take the first step towards financial security.
1. Identify Your Income And Expenses Collect your payslips, statements, bills and receipts to help estimate your major expenses for the year, such as bills or loan repayments. Put together a table comparing your income with these expenses. Use our budget calculator to assist you.
2. Anticipate Other Expenses Estimate the percentage of your income you spend on the following categories. Then add these categories to your budget:
Housing.
Food.
Transportation.
Clothing.
Medical.
Savings.
Entertainment.
Insurance. (Car/Home/Health).
3. Use Multiple Accounts Separate your savings from the money you use for bills and everyday expenses. Consider automatically transferring money from your salary into your Savings Account.
4. Monitor Your Spending Save receipts and keep records of all your expenses. You will be surprised to see what exactly you are spending your salary on.
5. Review Your Progress Compare your actual spending with your budget and make changes if necessary. Look for ways to reduce your spending if you exceed your budget.
By managing your expenses so that you spend less than you earn, you will have spare cash to invest, meet unexpected expenses or save for something special.
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