In today’s tough economic climate, it is more important than ever to budget and establish a savings plan. This is because budgeting is the best way for you to take control of your finances, save money and plan for the future.

Few individuals or families know just how they spend their money.  They know that at the end of their pay period – it is all gone.  A budget will change this.  It is the direct and sensible approach to personal money management.

Basically, a budget is a financial plan that itemises an individual’s or a family’s spending and helps accomplish short-term and long-term goals.

Its main purpose is not to get you out of trouble – although it will help.  Better still, it will keep you out of trouble in the first place.

In fact, a budget is really an essential part of everyday life. Without a budget it just is not possible to cope with those unexpected bills and to see at a glance, how you can most easily cut back you’re spending.

The ultimate aim of budgeting is to ensure that you can:

• Adequately meet all your financial commitments and
• Have some money left over to save.

Set a savings goal that is within your reach and will not put a strain on your budget.  Even if you begin by saving only a small amount each pay period, this will add up over a year to a respectable amount.

People with young families should aim to build up an emergency fund equal to three months take-home pay in case of retrenchment or emergencies.

Remember:

• Your savings will help you through those difficult times and emergencies;
• If you have money saved, you can use it in emergencies instead of credit cards (with their high interest charges);
• By saving, you will establish a financial track record, which will be important when you apply for a loan for a major purpose (house, land or car);

The advice contained herein does not take into account any persons particular objectives, needs or financial situation. Before making a decision, persons should assess whether the advice is appropriate to their objectives, needs or financial situation. Persons may wish to make this assessment themselves or seek the help of an adviser. No responsibility is taken for persons acting on the information provided.