OPINION: Budgeting made easy
Although budgeting may seem like a dull and time consuming exercise, the benefits you receive will make it worthwhile.
Say goodbye to sleepless nights spent worrying about managing your money by putting together a sensible budget that you can follow every month. Budgeting makes it easy to monitor and control your personal spending while also helping you to plan for your financial future.
Where to start?
Use an ordinary A4 book to draw up your budget. You could either copy the template included or just use it as a guideline, tailoring it to suit your personal needs.
Use a fresh page every month, with the right hand side for the budget and the left for notes and explanations. For example, in May you may note that you lent R500 to Mary. At the same time, you can make a note in your budget for June to remind yourself that Mary owes you R500, which she promised to repay on 15 June.
Begin by writing down your monthly income from your salary slip after all the deductions your employer has made. Also include any additional income, such as interest earned on investments or rental income from a second property. Add these up.
Then write down your fixed monthly expenses and prioritise your debts. These are essential items, commitments that you have made and that must be honoured if you are to maintain a good credit record. These may include rent, home loan repayments and hire purchase agreements. Add these up.
The difference between your fixed monthly expenses and your income is your discretionary spending. You can spend this on optional items such as holidays and entertainment.
When should I draw up a budget?
Just after pay day. You should pay your fixed monthly expenses first before you start spending on luxury items.
While it may seem difficult to start using a budget, it will become a habit after just a few months. You may even be surprised just how much you learn from budgeting, such as how to stretch your money or to save for a special treat.
Monthly budget
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Income |
Budgeted |
Actual |
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Salary |
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Interest income |
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Other income |
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Expenses |
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Home loan / Rent |
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Property rates / townhouse levies |
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Credit card payments |
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Vehicle financing / Transport costs |
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Hire purchase agreements |
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Insurance |
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Life assurance |
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Retirement annuities |
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Savings, for example, unit trusts, society schemes, fixed deposits |
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School / Other educational costs |
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Domestic worker’s wages |
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Retail card accounts |
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Savings for emergencies / Stokvel |
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Sub total |
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Variable monthly expenses |
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Water and electricity |
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Telephone (cellphone included) |
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Food |
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Petrol / Vehicle maintenance |
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Medical expenses |
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Household |
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Clothing |
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Entertainment |
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Sub total |
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Total expenditure |
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Total expenses |
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Boitumelo Mothoagae is the head of customer retention and financial adviser at financial service provider Liberty Life.
