Saving: Budgets and Budgeting

Q.1. What is a budget?

A budget is a document or file that helps you control your personal finances. It is a money management tool that helps you achieve your goals.

Q.2. Why is a budget important?

A budget is an enabling, not a restrictive, plan that helps you to understand your income and to determine how you will reconcile that money with your expenses and financial commitments. It helps you to balance expenses and savings and to prioritize your goals.

Q.3. How do you establish a budget?

Gather together any pay slips, bills, receipts etc., that show both your income and your expenses for a month. Use a budget form and enter the data. This will give you a snapshot of your cash flow and allow you to understand where your money is going. You can then plan on making adjustments to your situation and strive to meet that budget in the coming month. There are tips to help you make your budget work.

Q.4. How can I budget when my situation keeps changing?

Remember that a budget is like a living thing and it can change as you work to make it realistic and successful. Start with a basic plan and adjust it as your situation changes.