One important lesson that we must take with us from the COVID-19 crisis is how important it is for us to budget.
A budget is a written plan that helps you know how much money you have coming in and what you need to spend it on. It helps you keep track of what you are spending.
In your budget you capture: Your income – how much money you have coming in and where it comes from (for example, wages or allowances). Your expenses – how much money you spend and where you spend the money (for example, on bills, food and school fees).
It is important that you take charge of your money so that you:
- Do not find yourself living from one wage to the next
- Ease money stress and stay on top of your bills.
- Pay for the things you need such as food and your energy bill.
- Prepare for emergencies and unplanned expenses.
- Save for something special.
- Direct your money to where it matters most.
- A short–term goal might be to pay off debt or buy a new appliance.
- Long–term goals typically include plans for retirement, paying of a home or helping children start out on their own.
- When setting financial goals, think about how much you need to save and for how long.
- A medium–term goal may be to take a cruise or save the down–payment for a new car.
- Clear goals are the targets you are aiming for and help you build your plan.
- When setting financial goals, think about how you will accomplish that savings.
The following are important steps in budgeting for the family.