The thing is, many finance terms are just too serious and way too complex  for someone with a little less knowledge on finance. But if you had to break them down and get behind the meaning,  you would want to rename them.

Just like a lot of terms used, budgeting is also misunderstood. People think is difficult especially those that do not like math. So what is a budget and how does it work?

A budget is simply a summary of all the money that you have received for the month and tracking down where it eventually disappear to. It’s almost the same as looking at your bank account when you get paid and then watching it slowly depletes as you withdraw and swipes.

The problem with budgeting is when we thumb suck numbers. Often we know with 100% certainty how much will come in from our salary and side hustle but when asked what we do with the rest, we cannot account for any expenses. You sort of know you buy lunch every week but you do not really know how much that is costing you. You know you will not remember but you even have the guts to leave your slip in the shop because who cares anyways.

The thing is , for you to get good at managing your money, you must understand where your money is going. You need to find a way to track your expenses. Every time you buy something, write it down somewhere. When you make an EFT payment, write out a proper description on your bank statement so that you know what you made the payment for when you go review your bank statement.

For me, I find it easy to use a money tracker app.  There are many of them out there with different functionality and they are for free to download unless you want premium features. Get that app and set your month to start when you get paid and end on the day just before your next pay day.Add categories of the expenses you normally spend your money on such as rent, water & electricity, rates and taxes, church offering, black tax, car insurance, life cover etc. Every time you spend , update your app so that it can track your expenses.

The app I used called Money Lover ( see header), gives report of the % portion of each expenses for the month. It will also give you what your biggest expense was for the month ( see below). It also give you your running balance such that you can compare it to your bank balance, in case you miss to record something. There are functionality  to link it to your bank account but personally I have trust issues, so I do not recommend you link it.


So let us use January as a trial month to gather evidence of where our money is going. Only when you know how you spent your money last month you can actually plan on how you will use it next month.

Download that app, track your expenses and we will get back to this at the end of February.






13 thoughts on “How to budget #Wednesday#

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