Creating a budget
Use our personal budget template to help you feel more in control of your money.
Step 1: Calculate your net income
Start by calculating your your net income. That’s your take-home pay—total wages or salary minus deductions. Focusing on your total salary could lead to overspending because you’ll think you have more available money than you do.
Step 2: Track your spending
Once you know how much money you have coming in, the next step is to see where you are spending it. Tracking and categorizing your spend can help you determine what you are spending the most money on and where you can make savings.
Step 3: Set realistic goals
Before you start sifting through the information you’ve tracked, make a list of your short- and long-term financial goals like paying off debt or saving for your child’s education.
Step 4: Make a plan
You now know what you’re actually spending and on what. If you categorise spend into needs (such as accommodation) versus wants (such as a monthly music subscription) you will be able to see which the ways you can cut unnecessary spend to redirect money to your financial goals.
Step 5: Keep to your budget
A budget is to help you feel more in control of your money, not to feel controlled by it. Don’t plan to save what is left after spending, but spend what is left after saving. If an emergency comes up, you will have access to your savings. This way – you are making conscious choices about how you spend your money, and contributing towards your life ambitions.
Remember, even small savings can add up to a lot of money, just by making one little adjustment at a time.
Step 6: Review your budget regularly
It’s important to review your spending on a regular basis to be sure you are staying on track. Your expenses and costs of living may increase over time. Your salary could change or you many have new goals to achieve. Whatever the reason, get into the habit of regularly checking your budget.
