Budgeting 101


    A plan for spending, saving & investing money to reach our financial goals.

    • It 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 complicate; start with the 10-10-80 formula.
    • Save 10 percent of your income, give away 10 percent of your income, and 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, remittance
    • 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

    • Be disciplined
    • Always seek ways to reduce expenditure
    • Explore additional streams of income


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

    • Online Budget applications such as Home Budget and Spend Book
    • Physical envelopes, appropriately labeled
    • Spread sheet

    Benefits of budgeting

    • Helps you prioritize and plan for the future
    • Charts a course towards financial goals and dreams
    • Helps you live within your means
    • Gives you peace of mind and restful nights
    • Shows where your money goes and reveals overspending
    • Promotes financial success for your family
    • Helps you to develop self-control
    • Helps your family grow harmoniously as together you set common goals
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