A Plan for Spending, Saving and Investing Money to Reach Our Financial Goals

Having a budget is the first step towards achieving financial independence
A budget can be prepared for an individual, a family, a business or a country and for any period, daily, weekly, monthly or annually
Budgeting does not have to be complicated. Start with the 10-10-80 formula:
- Save 10 percent of your income.
- Give away 10 percent of your income.
- Allocate the remaining 80 percent of your income to all of your spending categories.

This simple formula will help you save, spend within boundaries and be generous as well.

Important points to bear in mind when creating a budget

Income– Include income from every source – salary, dividends, remittances, secondary jobs
Expenses– In order of priority, ensure that every expenditure is included
Financial goals– Determine short, medium and long term goals and assign a priority to each
Know the difference between the things you want and those you need
Identify and eliminate unnecessary expenditures
Ensure that the budget is realistic and flexible
Saving must be included in your budget
Budget monthly for periodic expenses, such as school fees, property tax, and vacation

Advice for maintaining a budget

How to execute your budget

The method used to execute your budgeting plan should be one with which you are comfortable. Below are some options:

Use online budget applications such as Home Budget, YNAB, Good Budget and . Mint
Place the amount budgeted for each category in envelopes, appropriately labelled
Use a spreadsheet

Benefits of budgeting

A budget is telling your money where to go instead of wondering where it went – John Maxwell