Over many years as financial planners, we have found that many people do not budget.
Our guess is the “schlep” factor is a major reason for this.
What is a budget?
It is a dynamic summary of your net (after tax and other deductions) household income and expenses. If you are living above your means (spending more than you are earning), you are using debt to finance your lifestyle.
An important part of budgeting is making allowances for varying expenses and irregular expenses, such as the cost of servicing a vehicle. Many people get into trouble because they do not have an emergency fund. More about that in a future edition.
A proper budget allows you to plan, to see what you are spending money on, and where you can curb spending. People are often very surprised to see where their money is going.
A very user-friendly budgeting tool is Old Mutual’s 22Seven app, which you can download via Google Play, App Gallery, or App Store. Signing up is free and you can watch an informative video here:
https://www.22seven.com/
The app integrates with your bank accounts and makes budgeting a breeze!