How to plan a budget

A budget is a plan for how you will spend your money over a specific period (daily, weekly, monthly, yearly). It helps you track your income and expenses.

Budget planning is as simple as that:

  • Start a budget by gathering your bills and pay stubs: think about how you spend money, besides paying your bills. For example, do you buy a cup of coffee every day? Do you pay for education, entertainment? After a month, that coffee, education and entertainment money could add up to an expense you might write down.

  • When you have your bills and pay stubs: write down your expenses (the money you spend).

  • Write down how much money you make: in other words: what is your income

  • Subtract your expenses from how much money you make

  • If the money you earn is less than your expenses, reduce your expenses by eliminating those that are not necessary or essential.