Putting Your Budget To Work For You
– by Andrew Bradley
Do you know how to create an effective budget? Andrew highlights a few wonderful suggestions below:
A few years ago a friend tried to convince a group of us to invest R1000 per month over five years, to fund a trip to watch and experience the Rio Olympics. However, not many people went for the idea. A few did. As a result, some of us were able to experience an incredible event that we will remember for ever. The difference between those that did and did not go to the Olympics was simply those that decided to put the money away for that purpose – and not be overwhelmed by apathy. Every one of us could afford the R1000 per month, and most of us wasted it in one way or another.
The power of a budget
That is the simple power of a budget. It is like a route map when you are setting off on a journey. You have to decide where you are going, then you have to plan your route and then start travelling. You should work out your budget in writing. Firstly, to ensure that it is accurate, and to help you to remember things, secondly because you need to check from time to time how realistic it is and if necessary rebudget as circumstances change.
To make the exercise work for you, a balance is essential. Not only should you balance your income and expenses, but also balance today’s needs with tomorrows needs and aspirations. If you make it too difficult to stick to with too many sacrifices it will not work on a sustainable basis.
Keep it simple!
Keep it simple! Check how much money you have and how much you get in each month from whatever sources. Then list you monthly expenses putting them into categories.
Your expenses and savings should never be more than your income. If your budgeted expenses come to more than your budgeting income you have two choices: spend less or earn more. In most instances it would be easier to spend less. To spend less you will have to make some hard choices now. You will have to change your priorities. Here you need to get a balance between your short term, medium term, and long term goals.
Create a balance
You have a simple choice with your money – spending it now or in future. If you spend it all now you will suffer in future. If you save everything now, will you have enough to enjoy your life now? You need to make sure that you understand the sacrifices and balances that you need to put in place to achieve your short, medium, and long term goals. This will bring happiness and joy to your life, not only in future but in the present as well.
JOY! Magazine (May 2017)