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Budgeting is a crucial part of any financial success and is a necessary skill for survival in today's fast paced economy. No company can be successful without a financial strategy and likewise no person can be financially secure without a budget.

A budget is a plan of your (predicted) future incomes and expenses. This plan will help you see where all your money is going and it will help you effectively plan your short and long term spending decisions. Budget planning in itself is not a difficult task; all that is required is a logical and methodical approach.

The best budgets are simple and prudent, taking into account emergencies and unexpected expenses. It is worthwhile doing the budget in a spreadsheet program such as excel as the final budget is easier to set out and calculate and can be printed multiple times for each member of the family.

To start a budget first get together all your monthly accounts such as:
The electricity bill
The gas bill
Rates and taxes
Mortgage repayments
School Fees
And any other expenses that do not change from month to month
These are your fixed expenses.

Then collect the receipts for things like:
Food and beverages
Clothing
Consumables (light bulbs, detergent, etc)
Gasoline
These are your variable expenses as they change from month to month.

Add up the fixed and variable expenses, this figure covers your expected expenses for the next month.

Now for the prudent part, think back on all the times that you have needed money unexpectedly for things like car repairs, emergency medical bills etc. These expenses must also form part of your budget. A good rule is to increase your expected expenses by 10-15% to cover all of those sudden emergencies, so that you're always on the safe side.

Now subtract this figure from your net salary (the amount you receive after tax and deductions). The left over amount is the amount of money that you can spend on your "wants" since all your needs have been covered.

A good option for any spare money is to invest it. This will help you beat inflation and the constantly rising cost of living. Fixed deposits are good for small investors as they offer reasonable returns with virtually zero risk. For instance if you were to invest $200 a month for 10 years at a rate of 9% Pa at the end of the 10 years you will have $38702 compared with $24000 if you had just placed the money in a savings account. To find out about fixed deposits inquire at your local bank.

Now that you have your budget it is vital that you stick to

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