Budgeting, simply put, is a plan in numbers which keeps you in the know about how much money you are saving and how much you are spending. It is an estimate of how much money you will make and spend over a certain period of time, such as a month or a year. Budgeting practically puts you in charge of what you can afford and when you can afford it. It helps you to avoid overspending on things you don’t need, so you can save more and have the funds to cover anything unexpected without borrowing. If you are struggling with financial stability this period and you don’t have a budget, try to get one.

Getting a budget helps you figure out how much money you get, spend, and save. A budget puts a person on a stronger financial footing. For example, if your budget shows that you spend N100,000 on clothes every month, you can decide to spend N50,000 on clothes and use the rest of the money to service other bills or save for other pressing needs.

Madam Nancy, a banker, changed the beverages and cereals used by her family members to a more expensive brand because it was hyped by her colleagues as the most consumed and purchased brand when it comes to beverages and cereals. It was also said that families using such brand in their home is well-to-do. Madam Nancy, in a bid to belong to the well-to-do gang, changed to this new brand without consulting her family members because she could afford it without having to forfeit other pressing needs in her home. She continued the purchase of this brand even as the prices of the products kept going up, just to sustain the well-to-do gang status, and the result of her action kept telling on her monthly budget. Recently, when she went to purchase the same brand of beverages and cereals and was told the current price, she quickly requested for her former brand of beverages and cereals which was supposedly seen as a brand used by not-well-to-do families. On getting home that very day, she compared the prices of the two beverages and found out that she had saved some reasonable amount of money by sticking with her former brand.

If your budget is suffering like Madam Nancy’s because you are the type of person currently struggling to maintain a particular standard of living in the current state of Nigeria’s economy, please help yourself like Madam Nancy did, otherwise you will always exceed your budget and you will never get budgeting right. Stick to what works for you and not what other people said worked for them.

A budget is always considered as the foundation of your financial life which helps you to build a solid spending and saving habit. It helps you to properly direct your income toward your needs and wants and steer clear of overspending and debt. It tells you what you must send money on, and where you can spend less or more money. Making a budget can help you to make sure you do not run out of money each month.

This little guide on how to make a budget can go a long way to help.

1. Write down your expenses. These are what you spend money on.

2. Write down how much money you make. This includes your paychecks and any other money you get.

3. Subtract your expenses from how much money you make. This number should be more than zero. If it is less than zero, you are spending more money than you make. Look at your budget to see what you do not need or what you could spend less on.

Here are some guides on how to use your budget on a monthly basis:

i. At the beginning of the month, make a plan for how you will spend your money that particular month. Write what you think you will earn and spend.

ii. Write what you spend. Do this on a daily basis.

iii. At the end of each month, check if you spent what you planned to spend.

You can use this information to help you plan your next month budget.

Enjoy your weekend wisely.