5 Budgeting tips that are easy to follow

Budgeting comes down to knowing what you earn and what you spend. It helps us stay on top of our bills and save up for what we want, but the very prospect of budgeting is enough to see many of us break into a cold sweat.

Follow these simple budgeting tips:

 

1. Get all the information

Start with how much money comes into your account every month (after tax). Then look at how much goes out.

2. Do the maths

It’s crunch time: take what you earn after tax, minus all your expenses, and see how much you typically have left over at the end of the month.

3. Make some changes

Divide your expenses into two categories: fixed (rent or bond, insurance and medical aid) and flexible (groceries, entertainment and petrol).  Think about what flexible items you can cut back on. But be realistic. Your budget must be achievable. It’s not there to spoil your fun but to help you take charge of your money.

4. Be committed

Write your budget down and stick it up on your fridge or somewhere you’ll see it. This will help you stay focused on the big picture - financial freedom.

5. Track your progress

Check your budget every month. If things aren’t going to plan, don’t give up. There are also plenty of apps to help you track your budget as you spend daily. And remember, your budget should remain a work-in-progress, which you continually adjust to suit your changing lifestyle.