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Knowing how to budget to accommodate your lifestyle and achieve your goals using the resources you have is a very important life skill to learn. Many people fail to learn this skill either through ignorance or laziness and yet it is a basic life skill that should be acquired to ensure financial survival.

Learning to budget can mean more than just surviving financially. Used wisely and adhered to it can be your foundation for financial success, whatever that may mean to you.

Different people have different ideas of what financial success is. For some just paying off the mortgage is enough. Others may want to quit their job and become self-sufficient or be millionaires. When you know how to budget and use your money wisely the world is your oyster.

A budget is a plan to be in control of your money. This is called money management. Working out a basic budget is very simple to do.

The idea is to know how much money you have coming in (incomings), where it goes when it is spent (outgoings) and knowing how much money you have left at the end of a given time i.e. weekly, monthly and yearly (savings).

You should have at least two budgets. The first one depends on how often you receive your pay check weekly, fortnightly or monthly. This is your on going budget for your every day expenses during each pay period.

The second is a yearly budget or your total incomings and outgoings for the year.

To begin your ongoing budget first you have to assess your incomings. Incomings represent every cent you receive on a regular basis, usually your salary or social security payments etc. Add them up and write the figure down.

Next list all of your expenses. Expenses include every cent you have spent for whatever reason of your income.

Typical expenses usually include such things as rent/mortgage repayments, food, utilities, petrol, insurance and entertainment. The list will be different for each individual, but the important thing is to account for every cent of your pay check no matter what you spent it on. Add all of the items up.

Now subtract your outgoings from your incomings. Hopefully you will come up with a number that is less than your incomings. If you do, congratulations! This indicates you are in the black" and you are living within your means.

If you are in "the red" you are spending more than you earn and you will need to find a way to remedy the situation.

Whatever the result this total is called the "difference" between your incomings and outgoings.

If you receive any other income

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