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.
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.
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.
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.
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.
The easiest way to save money is not to buy unnecessary items at all.
EXAMPLE OF BUDGET TABLE
|Salary (After tax & deductions)||R||R||R|
|Other (e.g. rent)||R||R||R|
|Total Monthly Income||R|
|Rates and Taxes||R||R||R|
|Medical Aid premiums||R||R||R|
|Medical and dental (not covered by medical aids)||R||R||R|
|Family & household|
|Telephone / Cellphone||R||R||R|
|Laundry / drycleaning||R||R||R|
|Pet Food / Vet||R||R||R|
|TV License / DSTV||R||R||R|
|Sport / recreation||R||R||R|
|Savings & Investments|
|Retirement annuity contributions||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|
|Haircuts / manicures||R||R||R|
|Other debt payments||R||R||R|
|Nett Monthly Balance (income less expences)||R|