budgeting 2 2 1

Okay, I have talked about Tips on How to Stick to your Budget and Best Tips and Tricks for Budgeting in my previous posts. Now I am going to share with you a template on how to budget properly.

To create a budget, you need to first list out all your expenses on a daily, weekly and monthly basis. You may take a whole week or month to make this happen but you don’t need to do so if you can remember virtually all your expenses. After you have written down all of your expenses, it is time to apply the scale of preference, i.e opportunity cost. In Economics, an opportunity cost is defined and the alternative has forgone and this simply means forgoing an expense for a better alternative.

It means prioritizing, getting the most important items at the top of the list and scraping others that are not of much value. Depending on the amount of your income, you may still create a scale of preference for the ‘unnecessary’ items just to give your self a treat from time to time and add to your budget.

Let me say here that I am only giving examples. You may calculate yours to align with your income. I would assume here that you earn #100,000.00 on a monthly basis, here is the breakdown;

Income   #100,000.00
Tithe (For those who pay at 10%)     #10,000.00
Rent (Max. 20% or your monthly income)     #20,000.00
Savings     #10,000.00
Fuel/ Transport     #20,000.00
Electricity       #3,000.00
Water       #2,000.00
Facility (For those in an Estate)       #5,000.00
Groceries     #20,000.00
Entertainment       #2,000.00
Cable Subscription       #2,000.00
Feeding       #5,000.00
Donations/ Charity/ Alms giving       #1,000.00
Total         #100,000.00                                                  
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Now, once this is done, this next step is to apply it to your everyday life. I would suggest that once you get paid in a month, you start with paying all of your bills. Where the bills are not due at the beginning of the month, you can create a separate account where you pay in all the money that should be used for your bill payment. Also, endeavor to have another separate account for your savings, if possible do not link it with any ATM, online banking or mobile app. The reason for this is to prevent you from having quick access to your savings. By the time you think of having to go to the bank to withdraw, you think again.

Once these are done, you will have left the money for your fuel/ transport, groceries (if you do not shop monthly) and feeding. Then, you need to split that amount into four (4) weeks (bear in mind that some months have five (5) weeks. So, let’s say you have #45,000.00 for a month, if we divide by 4, you will have #11,250 to spend on a weekly basis. In a case where you shop monthly, let ’s assume you spend #15,000.00  from the #20,000.00, you will be having #30,000.00 for the rest of the month and if you divide it by 4, you will have #7,500.00 to spend on a weekly basis.

I would advise that you have whatever cash usable for the week in cash (if it is not a large amount) which you can leave in your house or wallet to enable you to resist the urge of using your ATM cards or spending extra cash on transporting yourself to the bank every other day. At the end of the week or month, you may pay into the bank whatever extra cash you have from your spending.

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You will notice that the last item on the list is ‘Donations/ Charity/ Arms giving’. This is because it is very important to give. As a Christian, Jesus said in Acts 20:35 (KJV 1900) that ‘I have shewed you all things, how that so laboring ye ought to support the weak, and to remember the words of the Lord Jesus, how he said, It is more blessed to give than to receive’. I am not a Muslim or of any other religion but I believe all other religions make room for ‘giving’. By giving, you not only help the person who is receiving from you but you also pave way for your own success in the long run.

So, how have you been budgeting wrongly in the past? And was this blog post helpful? Do not hesitate to share your ideas with me by commenting below. Cheers and Happy Budgeting!

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