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Budget: Finally setting that budget up.

Falling into the habit of budgeting is a great habit to get into the groove of. Ensuring that you have a budget in place will make sure that all your financial needs are met, as well as making sure that your income is spent effectively. Business Tech, 2020 states that there has been a 25% increase in stress due to money issues in South African households. Although setting up a budget is not going to solve all financial issues, it can alleviate some stress and help you feel more in control of your financial wellbeing.

Here are some steps to help you to start setting up that budget.

1.) Set yourself goals for saving.

Like mentioned before, setting yourself goals in any area in your life is a good idea. Setting goals for yourself in a financial way will help you know where you are going when you begrudgingly put away money instead of spending it. It is important to know what goals you have, to work towards them consistently. It is also essential in goal setting to make the goals achievable.

2.) To budget: Identify all income and expenses.

When identifying your income versus expenses, you need to make sure that your expenses do not exceed your income. While unexpected expenses do pop sometimes, lifestyle expenses can also sneak upon us.

If you do have yourself in a situation where your expenses exceed your income, Forbes (2020) state that you can follow the ABC’s.

Assess the situation:

You will need to assess the situation of your finances before you can make any changes for the better. Knowing what your income and expenses will help in the next step where a more detailed view is taken.

Break Down:

Once you have an overview of your income and expenses, it will be easier to break down what you are spending your money on into specific categories of where exactly that you spend your money (For example; groceries; cell phone bills; rent; entertainment).

Cut and budget:

From breaking down your finances, you will have a clear idea of the surplus on your bills, if it is not a monthly payment and essential to living… it should be eliminated without question.

Decision time:

You will need to decide what measures you will need to take to get back on track financially. Actions like cutting out the “On the go” coffee trips in the mornings or even cutting the takeaways. There are even ways to make your money go further at home.

3.) Plan to adjust those habits.

With a full view of your financials, you will be able to adjust habits and work closer to the financial goals that you have been meaning to get to for years. Planning effectively and adjusting to reach your financial goals like buying a car or a house will be worth it in the long run.