Having a budget is something that is personal to you and your circumstances. To make an effective budget plan, be honest with yourself and make a note of what’s coming in and what’s going out each month. Knowing exactly where your money goes allows you know what exactly you have to spend after taking care of your bills and other necessities. That way, you will become more cautious of impulsive spending.
- Your Income – to draw up a plan, you will need to list all the money that comes into your household each month.
- Your Outgoings – Write down all your household’s basic living expenses . You should only write your regular financial commitments such as electricity, water, telephone/ recharge card, security, rent (you take the rent you pay per year and divide that by 12 months), Tithe etc.
- What you owe – you would need to work out how much you owe your creditors. Enter a total for all your personal loan, car loan, credit debts.
- What you would like to save – Enter an amount that you would like to save each month. You work so hard that you deserve to pay yourself something. Think of your savings/ investment as ‘your money working for you whilst you work for another’.
- One you have all of your income and outings (including debts and savings) you can see what is left over to spend.
| Regular Monthly Income | NGN |
| Your Salary | NGN |
| Your partner’s salary | NGN |
| Rental income | NGN |
| Pensions | NGN |
| Investment income | NGN |
| Other benefits | NGN |
| Other | NGN |
| Other | NGN |
| Net monthly income (A) | NGN |
| Regular monthly Expenses | NGN |
| Tithe | NGN |
| Rent/Mortgage payment | NGN |
| Insurance | NGN |
| Electricity | NGN |
| Other utilities | NGN |
| School fees | NGN |
| Telephone costs | NGN |
| Diesel | NGN |
| Petrol | NGN |
| Grocery/Food | NGN |
| Loan | NGN |
| Credit card payments | NGN |
| Savings | NGN |
| Net monthly expenses (B) | NGN |
After determining A and B, next step includes
- Whats left after calculating outgoings (expenses) from income? A – B
- Determine how much would you like to save/use to pay off debts?
- Final step after these is to calculate how much is left for spending.
Forming the right habits
- Open another account, a bills account, where you set aside enough money to cover your bills on a monthly bases and thereby you will know how much you have left to spend.
- Try to save any windfall or bonuses for the future
- Always check your bank statements for anything amiss or to spot increasing fees.
Written by Tope Omojokun, Asset Manager
