Creating a budget that works just for you!

Hello everyone and welcome to my blog.

Its a new year in a new decade, pretty cool, huh? Well, I sure am glad to see this new year. I am so excited at the endless possibilities and the long list of things I want to achieve personally and for the business. What are you excited about?

So everywhere we look and turn we hear and see “have a budget!” “Have a plan!”, “Set out goals!”, “Be specific” and so many other words that jolt you and make you think you are just wasting creative time. I mean I have set my goals for the year and all the steps towards achieving them have been clearly detailed, but sometimes, it leaves me wondering if there is more to be done. I looked at my goals for the year and realised that without a budget, I was just playing with words. So I set out to be very clear and specific in my budget setting.

A budget is a document that keeps you in control of your cash flow and finances. It helps you have a proper saving and spending plan so you don’t wake up and find yourself broke. It may be a little difficult putting down all items but once you get the hang of it, it’s super easy. It also helps you with periodic payments and bills so you get to keep track, be in charge and stay winning.

Last year, I realised I was able to tell where most of my money went and I was also able to reduce spending in some areas and increase savings as well. This wouldn’t have happened if there was no budget.

To create a budget, you need to know what your spending pattern has been for the last 2-3 months. You can do this by checking your expense list for the past months (If you save your receipts and print outs like me, it will be easy peasy). If this is not available, then check your bank balance to get an idea. You might want to categorise these into groceries, clothing, child care, maintenance, utilities. Also items like travel, birthdays, weddings (If you live in Nigeria, best believe you need a budget for this!)Then identify those one-off payments you make- Car servicing (probably every quarter) , insurance payments, birthdays and holidays can go here too if you like to throw parties. Make provision for them by saving monthly and setting these aside till payment dates are due.

You also need to set aside a certain sum that goes into your savings. This MUST be set aside before all the spending begins to avoid stories that touch. I tell my sister every time that once you touch a sum of money, it just starts running away haha. No one can tell you specifically how much to set aside. Just make sure it’s not too large a chunk of your money else you will be in debt and this can affect your spending pattern and dampen your morale. Also make sure its not too little that it makes no difference at the end of the year. Take out a chunk that will make a difference to your saving without ruining your whole month!

For instance- If you earn N250,000 a month:

pay your tithe (if you are a tither)- N25,000

Save – N30,000

Feeding and groceries- N30,000

Debt repayments- N30,000

Communication bills – N15,000 (Data and calls)

Car servicing- N20,000

Charity- N50,000 (family/parents/ community)

Misc- N20,000 (weddings)

Balance- N30,000

The next thing after creating a workable budget template is to ensure you stay within the budget when spending. Its really easy to blur the lines so you have to be disciplined enough to say “No” and wait till the next month to make a purchase if it exceeds your current spending in the present month.

If you have problems with maintaining savings, then you might want to try investing the money or using some savings app like piggyvest, cowrywise or the likes. Makes it more difficult to touch and keeps it as savings.

By the end of the month, take a look at your actual spending and compare it with your budget. This will help you develop an accurate budget for the next month. It also gives you room to tweak your budget to meet current spending realities. Some budget lines will go off totally, some will increase and some will definitely loose some weight.

Just remember, nothing is cast in stone. If you over spend in the first month of trying out the whole budget thing, its ok. Don’t over think it, Just make sure you are more disciplined the next month and keep at it.

I sincerely hope you will give budgeting a try and see how good it works for you. You can even try out numerous budgeting apps and tools to make it more “professional”. Or resort to the good old Excel spreadsheet…works wonders.

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