Money Talks: The no-excuses guide to budgeting

 

Managing your personal finances always starts with maintaining a personal budget.

Always.

There are no two ways about it: you need a budget. 

I will repeat that for the sake of those who didn’t hear me the first time: You need to maintain a personal budget to manage your personal finances.

I hear you say, “But a budget is so limiting, Bett.”

“I don’t make enough money to track it on a budget. So what’s the point?”

“I want to budget, Bett. I really do. I’ve tried many times in the past to stick to one but I’ve always failed.”

“Budgeting is so boring and so time-consuming. I don’t have that time.”

“I work so hard to make my money, Bett. Why can’t I just spend it as I feel?”

“I make enough money to take care of myself, my people and buy whatever I want. I don’t need a budget.”

No excuses

“Budgets are too complicated for me.”

“To be honest, Bett, I’m scared to find out how much money I actually spend in a month.”

All these are excuses.

You need to maintain a personal budget to manage your money. Iy Doesn’t matter if you have the discipline to stick to it. Or are so undisciplined that you make one, then completely ignore it. Or if you last made one in your Commerce class in high school. Or you don’t know how to make one. 

It’s 2021 and some tools make the process easy, quick and fun. (You read that right, it can be fun to maintain a budget.) And you can do it all from the comfort of your phone. 

A budget helps you track how you spend your money. When you know how your money moves – in from your income and out from your expenditure – you will plan better for it, you will be more organized in your life and you will feel that you are in control of your money.

That final point is very important: Control. When you are in control of your money, you will take active steps to cut down your expenditure, up your savings and stick your nose in the air to sniff out investment opportunities. 

Control equates to earning more money.

Your goals, financial and otherwise, will be achievable when you take that first step of creating a personal budget. 

Your budget will evolve

Budgets differ from person to person. Particularly, from age group to age group, and from gender to gender. 

The budget of a man doesn’t look like that of a woman. The budget you had in your 20s when you were starting out and still single will no longer fly when you are in your 30s with the responsibility of children, are probably partnered and are earning more money. It will be different when you are in your 40s and gearing up to step into new horizons.

Your budget will evolve as you evolve as an individual. 

In the next two stories, I will share sample budgets of different individuals in different phases of their lives. I will go into the details of what works and what doesn’t. I will also share tips on how these individuals can improve their budgets.

Before then, I have a little takeaway task for you. I want you to get a feel of how your money moves.

Here’s how: go through your bank and M-Pesa statements for the last two months, that’s May and June. (After the pandemic struck, most payments are now made via M-Pesa and not by cash. So you will likely find a cash trail of most of your expenditure from these statements.)

Open a new document on Google sheets. Populate it with the figures from your statements. 

Populate it going downwards, not sideways. Is that clear? No? OK, populate vertically, not horizontally. Have a column for May 2021 and for June 2021. If you get in the zone and feel like doing extra, pull figures for April 2021 as well. 

Keep it simple and keep your descriptions clear. Ensure that every payment has a description. 

Salary: X. Rent: X. Bank loan repayments: X. Supermarket shopping: X. Mama Mboga: X Booze: X

No amount is too small to be ignored – remember, that that’s money that left your account.  

When you are finished, you will have columns with the months, and rows of descriptions and your expenditure. Sum them up.   BY DAILY NATION