Four Simple Steps To Create A Budget

The first step towards achieving this is learning how to draw up a budget. 
  
Why is this so important? Simply put, having a budget helps you take control of your financial situation. It is a spending and a savings plan that ensures you have the ability to buy the things that you need, as well as the things you want. It also helps you to avoid landing up in debt. 
1. Set goals

Budgeting focuses mainly on short term goals, however, short term goals build towards medium and long term goals as well. So it is important to ask yourself these questions: What do you want to achieve financially?

What are your non-negotiable expenses? How much money can you afford to save each month? This first step is vital as it will help you make savvy spending choices. 
  
2. Determine the balance of your income and expenses
What is your monthly net (take-home) salary and are you earning any other income? Then work out your essential expenses such as rent/bond, transport costs, groceries, school fees and so on. Decide on the amount you can afford to save each month and then consider it one of these non-negotiable expenses. Decide what are the non-essential expenses? 

Leave a little room for these but you need to be ruthless if you want to effectively manage your money. Lastly, deduct your expenses from your income – this is your disposable cash. And remember, ‘disposable’ does not mean that it is there to be wasted. 
  
3. Trim some more
Budget for more but aim for less. For example, maybe you have planned that you will need 20000naira a month for groceries. Keep aside 25000naira, and then aim to spend 18000naira. Cut corners where you can. Find clever ways to stock up. Prioritising your spending will help keep you on track with your budget. 
  
4. Now stick to it
A budget is only helpful if you follow it. Like most things in life, this takes a little practice and a lot of self-discipline. If you stick to your budget you will soon find that being financially secure is most definitely worth the effort. 

There is no better time to start managing your finances like the present.  Now that you know how to create the perfect balanced budget, you never have to worry about over spending, having enough money or getting trapped in a pool of debt.