BUDGET

The process of calculating how much money you must save or earn during a particular period of time, and of planning how you will spend it.

Importance of budget

• Helps you control your spending
• Keeps you on track for your financial goals
• Helps you find financial contentment
• Keeps you from feeling financially overwhelmed
• Helps you avoid or get out of debt

Basic steps to making a budget

• Gather information you have regarding sources of income or expense. You need to know what is going out of your pocket and what is coming in.  The key for this process is to create a monthly average so the more information you can dig up the better.  

• Record all of your sources of income: self-employed, agriculture produce, loans, bursaries, grants, scholarships or have any outside sources of income be sure to record these as well. Record this total income as a monthly amount.
• Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month.
• Total your monthly income and monthly expenses. If your end result shows more income than expenses, you are off to a good start. If you are showing a higher expense column than income, it means some changes will have to be made.
• Make adjustments to expenses. If you have correctly identified and listed all of your expenses, then what you should be aiming to do is to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for each of your expense.
• Cut spending. If you are in a situation where your expenses are higher than the money you are bringing in, you will have to look at your variable expenses to find areas where you can make cuts to your spending.  Since these expenses are typically not essential, it should be easier to trim a few dollars to bring your expenses closer to matching your income.
• Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. 9. Plan for occasional expenses. Include room in your budget for expenses that come up from time to time, such as clothing 

Budgets are for saving too! If you have some money left over in your budget after you have paid all your expenses, add to your savings. The more you save, the sooner you’ll reach your financial goals.