Where do I start with my personal financial planning in these uncertain times?Wednesday | 08 April | 2020
Start with your budget. Your budget forms the basis of any financial planning, but when was the last time that anyone told you how to draw up a budget? The most important rule for your budget is to spend less than you receive.
Step 1: Determine your fixed expenses for each month (expenses you are going to incur every month, and every month the amounts will be exactly the same), e.g. car insurance, income tax and savings.
Step 2: Determine the variable expenses in your budget (these are expenses that vary from month to month), e.g. spending on social activities. Sometimes you budget, but later realise that your planning should be better in order for you to make it through the month.
Step 3: Draw up your budget at the beginning of the month. As soon as your first salary has been paid into your bank account, your budget template must be completed.
Step 4: Compare what has been budgeted for the month, and what you have actually spent.
This budgeting method is an effective way of identifying your own spending patterns. Initially, the method can be applied weekly until you feel comfortable with what your actual weekly expenses really are. Then it can be done on a monthly basis.
Solidarity Financial Services (FSP 15556) provides independent advice for needs such as retirement planning, income protection and estate planning.
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