Successful formula for Budgeting
Start your budget by paying yourself 10% of your nett income before you pay anybody else and put this money away every month. (You pay everybody else, but forget to pay yourself. This is the mistake most people make. If you are unable to pay yourself because of too much debt, start saving a small amount and work up to 10%. This will help you to achieve financial stability in the future.)
Your living expenses should not exceed 70% of your nett income
You should spend 10% of your money on having fun. (This can be saved for weekend or annual holidays, saved or spent, just as you please.)
The last 10% should go towards your dreams and goals. (This can include an annual holiday, new home, new car, own business, and anything that is immediately out of reach.
Why should you budget?
A budget will bring :
New priorities into your life
Stress about paying bills the becomes a positive routine experience
Enables you to focus on how to increase your income and
How to control your spending so that you will always have money.
What should we do?
Are your saving and spending habits working for or against you?
Don't impulse buy.
Cut down on eating out & entertainment.
Don't incur new debt.
Ensure that you have medical protection.
Don't use credit cards that are in a debit balance.
Obligate yourself only to house payments that you can afford.
Never sign as surety (guarantor) on somebody else's loan unless you are willing to pay if the borrower does not pay.
Review all insurance coverage to check whether you are sufficiently insured, but at the same time not paying too much.
Check that your bank charges are not excessive.
Shop around for the best interest rates on savings accounts.
Find ways to increase your income.
Sell items that you don't use.
Only borrow for good debt.
Put together a financial plan that you can live with and review it monthly.