Many of us have household budgets, which we live by allowing us, or showing us what we can spend each month.

Some people use elaborate mobile apps or spreadsheets or programs to set-up these budgets. But the reality is a budget sets itself up, once you know your priority bills and debts, and go from there.

A budget is really just a list of what your income/wages are and a list of your expenses or expenditures going out.

Money In – Money Out

Very simple in that sense.

What Are Priority Bills?

Priority bills are just that, a priority to be paid each month, and some of them are, in some particular order:

Then you move on to debts or loans. These would be prioritised by if they were secured or not.

Secured loans such as for a car, would take priority over any personal loans or credit cards.

Of course we need to put spending for food in the mix, and that would also be a priority. And you would pay your priority bills before you paid you other debts or accounts.

If you sit down with pen and paper and list these bills, and your wages/income, you pretty much have set-up a budget.

Whatever surplus income or money you may have, can be put towards savings, or other areas to spend.

If you are unsure about what your bills and spending each month is, just track it. You can write done on a piece of paper every time you spend money on something, or these days if you pay by bank card, review your statements.

You may be surprised how much you may spend each month on takeaways, booze, nights out, etc. Once you know where your money is going, you can make changes and adjustments.

That is budgeting.

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