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Many people live from month to month in the hope that their financial situation will will somehow manage itself. Spend what you need to spend and hope for the best! A state of financial chaos. The company retirement fund will take care of some of the retirement needs. And there is a life insurance plan as well. But there is no financial plan. No plan to ensure that all your needs are seen to.

WHAT IS A BUDGET?

A budget is a financial plan. It is a plan of all expected spending for the coming month (or year) and includes everything that must be paid for on a month to month basis. It is a tool to help you to manage your finances in such a way as to ensure that you are able to provide both for your current and future needs.

A business budget will include all payroll and consumable expenses, a provision for petty cash to cover unplanned day to day expenses and as well as planned maintenance and capital expenditure. A personal budget is not so different.

WHERE DO I START?

The best place to start is to find out exactly where your money goes each month. If you don't have detailed knowledge of what you spend each month, now is the time to find out.

Carry a notepad with you at all times. Write down everything that you spend. Include all payments, bank transfers, investments and loan repayments. Be careful not to double-count. If you pay for everything by credit card, and then pay the credit card in full, do not include the credit card payment as an expense item.

WHAT TOOLS DO I NEED?

The basic tools for a budget are a pen and paper, but a spreadsheet like Excel is very useful. If using a spreadsheet, then use the first two columns for income - description and amount. The next two for expenditure. You may allocate additional columns to record actual income and expenditure against expected.

Many templates for Excel are available from the Microsoft server.

Open Excel and type Personal Budget in the search bar. A long list of templates appears. There are many to choose from. The Personal Monthly Budget and the Family Monthly Budget provide a great start to budget simply and they are free. These allow for input of Projected Cost and Actual Cost for each item, Projected Income and Actual Income. The Personal Budget and Family Budget templates are slightly different as they include a column for each year.

SETTING UP A DETAILED BUDGET

* Income

Begin with your income. Enter your expected income for the month. Enter the expected earnings of other members of the household. Add these together.

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