BUDGETING

There are so many articles that have been written about budgeting. In this column we shall be looking at budgeting from the mind of a budget addict (Laughs). Well, it is true that one can get addicted to budgeting that it almost becomes uncomfortable. The good news is that there are more advantages in living a life governed by a plan and a budget.

This maiden edition will be looking through some simple and practical tips on how to plan a budget for our finances. We shall be looking at five of these tips in this edition, while the other tips will be discussed in the next edition.

The word budget simply means how you plan to spend, save and invest your money.

I have carefully selected the words: spend, save and invest because, the plan is not only to spend the money but to also save and invest the money. In His book, the richest man in Babylon, George Clason shared some of the secrets of how to spend, save and invest money. I will recommend this book to everyone interested in increasing their knowledge on how to spend, save and invest money. This column will be concentrating on how to develop the habit of drawing a plan on paper for every penny you intend to spend and also noting on paper every penny that you spend. This is actually very difficult to practise on a daily basis but this is the sacrifice that must be made to achieve the benefits of a budgeting your finances.

The best way to start is to decide to make a monthly budget. You can then simplify the monthly budget into a weekly budget. This weekly budget can then be simplified into a daily budget.

The next thing is to decide whether you will be planning on paper or you will be making use of technology. If you are computer savvy, it is recommended to use the Excel programme to create a plan of how to spend your money.

At this point, add up all your incomings (Salary, allowance...etc) so as to know the amount of money available to budget on.

Once you have determined your available resource, remove your tithes and budget the remaining ninety (90) percent.

You can decide to save 20 percent, invest 20 percent and spend the remaining 50 percent or you can decide to save 5 percent, invest 5 percent and save 80 percent. It is entirely up to you.