The “Joys” of Budgeting

From the desk of John Brandow
The “Joys” of Budgeting
In the next few weeks the postings on this blog is going to focus on personal budgeting
We have developed a full one day course covering these aspects and showing students
(grown up ones and potentially rich ones at that) how to do a personal budget and stick to it. If you follow our guidance you can be out of debt (totally and forever) within 5 years. No Bull and this includes your house !
1. Budgets are a necessary evil.
But it is the practical way to know what you’re spending - and to make sure your money is being used the way you intended it to be used. This is a discipline thing ! – we are going to talk about that a lot
2. The following are the basic steps in creating a budget
a. First determine what you are spending your money on – use a template available from us.
b. Determine your long term financial goals and evaluate your current spending against that
c. On a monthly basis track your spending to make sure it stays within your determined guidelines.( again using the template supplied by us)
3. . Don't be too finicky
When you use a computer program to do your budget you can get bogged down into too much detail. Detail is good – too much is not. Once you have gone through your prioritized detail and decide what to expand and what to cut out and the sums have made sense focus on these and worry less about other aspects of your spending.
4. The dangers of drawing too much cash and too regularly
If you find that you have drawn R1000 today and tomorrow you need to draw money again you might have a thief around – You ! Readily available cash in your wallet is a drawcard for unnecessary spending. Keep n little black book and keep record of what you are spending your cash on
5. Spending beyond your limits is dangerous.
But if you do, you are amongst good company(or bad ones depending on how you look at it )
You will need to make some serious efforts to cut back – the discipline thing !

6. Beware some luxuries disguise themselves as necessities.
A Budget should balance with the “surplus” being a surplus (+) and not a deficit (-) at the end of the exercise. It is when luxuries disguise themselves and you spend on them thinking it is a necessity that the balance is thrown out
7. The 10% rule
Your budget should ideally show spending of a maximum of 90% of your income – that way you will be saving 10% every month ! This should ideally go into a notice deposit account – you must not be able to draw it without giving notice.
8. The extras.
Don’t count “possibilities” into your budget. Bonuses , tax rebates etc should be windfalls and should ideally be going into the notice account !
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9. Beware of inflation
As your income increases over time and you start earning more money discipline can easily go out the window. Use this extra money as part of your long term goals. Notice deposit !
10. Last but not least = Discipline
If you lack this and do not keep to these rules debt councillors are in your