Your budget helps you set financial goals, control your expenses and, if you have a shortfall, it can help you figure out why, and what you can do to get back on track. A good budget will also help you plan for the year ahead and avoid any unexpected expenses.
Here’s an example to illustrate what a budget should look like.
Planning your budget
Download our cellphone app, now with a budget tool to help you manage your money better.
Some things to remember when setting up your budget:
- Yearly expenses: Make a list of irregular yearly expenses and spread the cost over 12 months. These expenses may include your TV licence, car licence and postbox rental fee. Don’t forget important birthdays, anniversaries and seasonal events such as Easter and Christmas
- Replacement expenses and repair work: Plan for these expenses by putting money aside each month for things that may need to be replaced or repaired some day, for example, your car or fridge
- Investments: Aim to save 10% of your salary each month. Consider interest-earning investments – they grow each month. Choosing an investment that you can name, such as one of our savings plans, can help you stay disciplined
Budget guide
A simple rule to consider when budgeting, is the 50/30/20 budget principle, where 50% of your household income should go towards essential expenses, 30% towards financial priorities, and 20% towards lifestyle choices.
Here’s a breakdown for you:
