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How to Make a Budget

Budgeting can mean different things to different people — whether you’re working towards becoming debt-free, budgeting for a low income or saving for that luxury holiday or a new car. However, the end goal of budgeting is always the same — to reach that financial target.


Setting your goal is the easy part, knowing how to get there can be a little more difficult. So take a look at how to make a budget with our budget planning tips below and start budgeting your way toward your goals.

How To Make a Monthly Budget

Before you begin, follow these steps to prepare your monthly budget;

    1. Calculate your monthly household income. Don’t forget to include alternative income such as a pension, spousal or child maintenance. If your income has been reduced recently or is expected to be, ensure you use the lower figure. 
    2. Identify your priority bills. Priority bills include rent/mortgage payments, utility bills, other payments that carry serious consequences if left unpaid.
    3. Calculate your fixed outgoings. These should include your priority bills and any other fixed monthly payments that you need to pay, such as debt repayments, mobile phone bills, car repayments, Dstv subscriptions, etc
    4. Calculate your non-monthly fixed outgoings. This is  where many people fall short when trying to budget. There are often payments that we make throughout the year regularly but not monthly. These can include car services, childcare, school uniforms etc. Once calculated, divide the total by 12 and you have your monthly total.
    5. Calculate your regular monthly spending. This is the other tricky one. Often when creating a budget it can be difficult to remember all the small everyday costs. It helps to go over historical bank statements or receipts to get an average amount. Always round up to give yourself a buffer. These outgoings can include food shopping, clothing, hobbies, fuel etc. 


How to make a budget In Excel or Google Sheets

Making a budget in Microsoft Excel or Google Sheets is an excellent way of keeping track of your income and expenses as well as having historic, easy to view payment tracking. This enables you to be able to look at where you could be saving money, it will also flag up any inconsistencies or problems with your finances earlier. 


Budgeting Your Way through Short Term Income Changes 

Here are some top tips for cutting back on daily and monthly expenses;

    1. Batch cook. Cooking large quantities of food and freezing it in batches can really cut costs and reduce waste.
    2. Fakeaways. Instead of ordering takeaways or eating out, try creating your own Indian or Chinese ‘fakeaways’. BBC Good Food has some great recipes for budget meals and fakeaways all organised into handy collections.
    3. Cancel unused memberships and subscriptions. If you have a gym membership that you just don’t get value from or a subscription to a magazine or other publication…cancel it. You can always rejoin or sign up again when you can afford to do so.
    4. TV & Entertainment. Do you have a subscription to a music service or TV streaming service? You would be surprised by how much you could save each month by cancelling or downgrading these subscriptions until your situation improves. There are free options for music streaming available (that may just have additional adverts) to use in the meantime. 
    5. Coffee. Many people list coffee as one of their biggest unnecessary spending habits. That daily coffee on the way to work or at lunch can mount up to a lot of money per month. If you spend R30 per coffee five times per week, that’s R600 per month. Invest in a good reusable coffee cup or flask and make it at home for the car journey, you’ll be surprised how much you can save!


At Debt Movement, we know that bad debt happens to good people. We specialise in Debt Review and make it our mission to rescue people who have found themselves in financial difficulty. Our qualified debt counsellors have used the Debt Review process to help thousands of people manage their debt and find financial freedom. Let us help you on your journey to financial freedom.