How to budget

You draw up a budget by making a list of your sources of money (income) and all the money you spend (expenses).

The basic principles of a budget are:

Pay yourself first - save.
Make provision for all the expenses you know will happen.
Make provision for unexpected expenses that might happen.

Here is an example of a simple budget:

THATO'S BUDGET
ITEM	BUDGET AMOUNT
Allowance/Pocket money Part-time job	R800 R400
Total income	R1 200
Savings Taxi Lunch/food Airtime for cellphone Clothes Movies and games Pay back loan from friend Unexpected expenses	R120 R200 R300 R100 R200 R100 R50 R50
Total expenses	R1 120
Balance (Income minus expenses)	R80

Thato should think about his budget before he spends his money. For instance, if he goes out one night and feels like having a "boerewors" roll, he should ask himself: "Do I still have money left in my budget to buy a roll?" If he has money left, he can buy the roll. If not, he should not buy the roll. Thato has R80 left in his budget (the balance), so he can buy the roll.