Personal Budget-Benefits and How-To

A personal budget helps you to plan how you’ll spend your money and keep track of your expenditures. It puts you in charge of your money. It’s, therefore, a great way to reach your financial goals.

A personal budget will help you keep out of debt and or manage your debts and eventually get out debts. It can be written on paper, or one can use software tools or apps that are readily available.

Here are five steps on how you can create a working budget.

Record your source of income

Know how much money gets to your bank account after all deductions like tax are made. This is your net salary. Record any other source of income, for example, income from a side hustle.

Make a list of your monthly expenses.

Make a list of the things you spend your money on every month. Monthly expenses can be classified as either fixed or variable expenses.

Examples of fixed expenses are rent or mortgage, internet services, credit card repayments, Chama contribution if you are a member of one, loan repayment.

Variable expenses include car fuel, electricity and water bills, groceries shopping, entertainment bus fare. If you have a monthly savings plan, which is very important, note it down as one of the expenses.

Make a provision for expenses that you would not necessarily spend on every month like helping other people through fundraisings.

Total the expenses and income

Get the total of both your expenses and your income. As a rule, your costs should be lower than your income or equal. This will avoid incurring any debts within the month.

Adjust your expenditures.

If your expenses are more than your income, you shall need to make some adjustments. Are there unnecessary expenses you have budgeted? Can you reduce money allocated for some variable expenses like entertainment, eating out among others?


“The slightest adjustments to your daily routines can dramatically alter the outcomes in your life.”

– Darren Hardy


Keep monitoring your budget

Track your expenses during the month by noting down everything you spend your money on no matter how small the amount used. At the end of the month, compare the original budget you had created and the expenses incurred during the month. You will be able to see the areas you performed well and those you need to improve on. This, in turn, helps you separate your needs from your wants and show you if you are spending on unnecessary stuff.


Keeping on track with your budget can take some time. However, with discipline and commitment, a budget will help you save more and reach your financial goals. Remember to always live within your means. Do you have a working budget? How has it helped you attain your financial plan?

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