HOW TO COMPILE A BUDGET?

STEP 1 : YOUR INCOME

Calculate the household’s total income. Add all salaries after deductions, and other income such as rent to obtain a total income that is available for spending.

Hint:
Transform your hobby or interest into an alternative source of income.

STEP 2 : FIXED PAYMENTS YOU MUST MAKE

Each month there are certain fixed payments that you need to make, i.e. rent/bond, car payments, insurance, school fees, loan payments & other accounts etc. Calculate this amount.

Hint:
Keep detailed monthly records of all expenses to assist you with your budget.

STEP 3 : VARIABLE PAYMENTS YOU MUST MAKE

Variable monthly payments also need to be made, but with the exception that you have some control in limiting expenses, i.e. groceries, transport, water/lights account, telephone, repairs, medical bill, bank charges etc. Calculate this amount.

Hint:
If these payments are not made, you stand to lose the items purchased or end up in court.

STEP 4 : DISCRETIONARY PAYMENTS

Discretionary payments can also be made monthly and are normally for luxury and unnecessary items like books, holidays, gifts, magazines/newspapers, pets & sports. Calculate your monthly discretionary payments.

Hint:
Implement procedures to control the use of these items and minimize these expenses in future.

STEP 5 : YOUR PERSONAL BUDGET

Use the budget table on the next two pages to indicate your income and planned expenditure – see if you have enough money to meet all the obligations.

Hint:
The easiest way to save money is not to buy unnecessary items at all.

EXAMPLE OF BUDGET TABLE

Income Description Self Spouse Total
Salary (After tax & deductions) R R R
Commission R R R
Over Time R R R
Bonus R R R
Investment income R R R
Other (e.g. rent) R R R
Total Monthly Income R

Expense Description Self Spouse Total
Housing      
Bond repayments R R R
Rent R R R
Electricity R R R
Rates and Taxes R R R
Water R R R
Insurance R R R
Repairs/maintenance R R R
Other R R R
Transport
Fares (Bus/Taxi) R R R
Car repayments R R R
Car insurance R R R
Car maintenance R R R
Fuel Costs R R R
Other R R R
Medical
Medical Aid premiums R R R
Medical and dental (not covered by medical aids) R R R
Other R R R
Family & household
Groceries R R R
Telephone / Cellphone R R R
Clothing R R R
Child care R R R
Education R R R
Security R R R
Household R R R
Insurance R R R
Domestic Help R R R
Laundry / drycleaning R R R
Pet Food / Vet R R R
Other R R R
Entertainment
TV License / DSTV R R R
Entertainment R R R
Sport / recreation R R R
Hobbies R R R
Restaurants R R R
Gifts R R R
Holidays R R R
Other R R R
Savings & Investments
Emergency Fund R R R
Retirement annuity contributions R R R
Unit trusts R R R
Life policies R R R
Endowments R R R
Savings R R R
Other R R R
Other Costs (Accounts / HP ect) R R R
Donations / Charity R R R
Credit card payments R R R
Income tax provision R R R
Clothing Accounts R R R
Bank Charges R R R
Haircuts / manicures R R R
Miscellaneous R R R
Other debt payments R R R
Other R R R
Other R R R
Other R R R
Total Expenses R
Nett Monthly Balance (income less expences) R