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Budgeting – A simple guide for everyone



A spending plan called a budget allows you to determine how much you should be spending each week or month to reach your personal finance goals. A budget looks at your income and expenses over a predetermined future period allowing you to adjust your spend periodically and take full control of your financial destiny.


  1. Calculate all income coming into your household
  2. Calculate your weekly/monthly expenses). Tip – Include your yearly expenses by dividing the costs by 12 (monthly) or 52 (weekly).
  3. Determine how much you would like to save each week/month.
  4. Subtract your income from your expenses. If the resulting figure is less than the amount you would like to save at step 3, look at ways you can reduce your weekly/monthly spend.
  5. Periodically review your budget and adjust accordingly to ensure you are meeting your personal finance goals.

In practice:

Let’s say your income is $1000 per week, your expenses add up to $700 per week and your weekly savings goal is $200 per week. $1000-$700-$200=$100. Your budget allows you to spend $100 per week outside your expenses. If however, your income is $1000, expenses are $800 and your savings goal is $250. $1000-$800-$250= -$50. Your budget is $50 short. You need to either reduce your expenses or revise your savings goal to fit into your budget.

Moneysmart has a simple budget planner to help you get started.


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