Budgets and Budgeting

Q.1. Why budget?

Budgeting allows you to increase your disposable income which increases your ability to make choices. It is a plan that allows you to control how your money will be used – just make sure that it is based on realistic information.

Q.2. Who should have a budget?

The simple answer is everyone. We live in a consumer society and are constantly exposed to a barrage of messages urging us to buy. Most advertising conveys the message that what you want is what you need whereas it is important to realize the difference between wants and needs so that we can utilize our money wisely and avoid losing control of our finances. It is usually far easier to spend less than it is to earn more so it is important to maintain control over how the money flows.

Q.3. How do I establish a budget?

Gather together any pay slips, bills, and receipts to determine what you earn and spend in a month. Use a budget worksheet to begin the process of establishing a budget. Remember that a budget should be adjusted as you monitor it over the coming months to ensure that it is realistic and reflects your financial situation.

Q.4. How do I budget when my income keeps changing or I have lots of debt?

If your income keeps changing you will need to revisit and adjust your budget on a regular basis. If you have a lot of debt you will have to understand that your funds will be tight until those debts are paid off. Paying off your debts should be a priority so that you can avoid costly interest charges and start to save money which will give you control and choices.