The 3 Principles of Budgeting

The 3 Simple Tips for Effective Budgeting

Budgeting is key to proper financial planning. But it should be noted, it’s may be difficult to change the way you spend money overnight. Budgeting principles are a learned process. Master them and you will have few financial hiccups.

In order to master budgeting principles, you have to understand that you will need to start small and work to get better. Start by making small changes on how you spend your money. Learn to spend less so you can save more money.

Savings come in handy for those days when you do not have enough to make ends meet. Often, as well, your savings may be tired to a goal – like a deposit for a house, a holiday trip or child’s education.  Whatever it is, use these 3 budgeting tips to effectively keep more of your money by planning your spending.

ONE: Gather Your Liability Slips

Gather your grocery receipts and slips of payments you make every month or a few times a month. These slips should give you rough estimations of how much you should spend on what. By going through your receipts and payment slips, you will get an overview of what you are spending and where you are spending it. The quickest way to do this would be to go through your bank statement if you use your card or bank transfers to make payments.

From looking at your receipts, payment slips or bank statement, you should be able to see how much you need to put aside for insurances, groceries, rent etc. After doing this process you will be able to see how much money you have left to spend on other things that are not as major.

Make Use of Technology

It is be advisable to list and do all your calculations on a computer, PC or budgeting app on your phone. This will make it easier and faster to calculate everything. A spreadsheet application like Microsoft’s Excel is a great tool for working out your budget. It has simple formulas you can use to add and subtract from your budget.

There are other programs that can help you to list your expenditure items and that will give you more accurate amounts. Include how much you want to save, monthly, in your budget. Adding things like how much airtime lasts you a month may be added to your budget. Many banks are also incorporating a budgeting facility on their banking apps to help you plan your income and expenditure with ease. Make use of these tools, life has become so much easier with technology.

Be Factual and Honest with Yourself

Be sure to be truthful with yourself in checking where you are spending too much or too little in certain areas. It’s easy to try and make yourself feel better about how you are spending your money by down playing your reckless spending. You will not be doing anyone any favors in doing so. Whatever your budget, remember to always diligently stick to it and try not to overspend.

Avoid buying expensive things when you don’t really need them.Get your essentials sorted out. Use whatever money is left after meeting your budget to invest and save to benefit you in the near and far future. Should there be any more left over, don’t forget to spoil yourself. After all, you did work for your money. It is always great to reward yourself with something that pleases you. However, remember not to go overboard.


  • Mmangaliso Nxumalo

    Mmangaliso is a tireless entrepreneur and investment professional whose background has primarily been in the Wealth Planning, Insurance Distribution, Capital Markets, and Employee Benefits Consulting space. He is a director on a number of companies, including but not limited to RedOystor Media, Sikhulele Africa, Umsuka Holdings.