Money Advice

5 ways to build a budget in 2022

Published by
Lethabo Ntsoane

Having a cash budget can help you so much financially by restoring financial order in your life.


A budget will help you take control of all the debt, expenses and income that you earn, enabling you to channel money where needed. By following your budget you will achieve your financial goals and live a debt-free life.

A budget shows your income distribution towards investments, debts, household expenses and other expenses.

It is a statement that you can fall back on and make reconciliations wherever necessary.

What is the purpose of a budget?

This is a planning tool that helps you with your financial plans for the month. It helps you with the timely meeting your financial obligations such as paying debt in time and investing accordingly. You can plan for a retirement using a budget or saving for your children University education.

A budget helps you get your priorities straight, by singling out each priority and specifying how each priority will be met.

All or most of your financial goals are fulfilled if a budget is used wisely.

What you need to prepare a budget

Details – You need to have details of what should be included in your budget. List all expenses down including entertainment costs.

Your list must also have names of the companies that you owe by name. Include investments and savings on your list, with companies that you want to invest or save in.

Amounts – Have amounts of all expenses, income, debt, investments and savings. Your amounts must be reasonable and realistic.


Any amount that is not realist should be disqualified from your budget. For example, if you have income coming in during the month but you have not worked for it yet then don’t include the potential income amount.

Computing device or notepad – You can use a computer device to write your budget. With Windows Word software you can access free budget templates to use for your budget.

It is no restriction to use a computer device, you can use a notebook or notepad. A computer device is preferable because you can easily alter your budget and set reminders for payments, savings and investments.

Here are 5 steps that you can use to create a monthly budget that will help you meet your budget targets.

1. Select a budgeting plan

You know your budget’s needs, so the next step is to choose a budget plan that suits your needs.

There are multiple types of budgets such as incremental, envelop system or zero-based budget. If you are budgeting for your household, then you are going to use the envelope budget system.

The envelop budget system allows you to physically distribute your monthly income towards different spending categories.

2. Find out your net income

Establish your net income after paying taxes. If employed, this is the amount that you receive from your employer straight to your bank account.

If self-employed, this is the amount that remains after paying taxes, medical bills and other contributions.

Earning other income from side hustles and part-time employment? You must include this income on your net income.

However, you need to pay your taxes before adding the amount.

3. List your expenses and categorise them into a fixed and variable cost

Write down a list of all your expenses. This is a long list that will have all your living expenses on it.

All your needs and wants should appear on the list. Include your home loan repayment, school fees, groceries, and all other things that you spend on.

Categorise your expenses to fixed and variable expenses for the month. Fixed expenses stay the same from month to month while variable expenses change from month to month.

Your fixed expenses will include DStv, home loan, car loan, insurance, etc. While variable expenses include electricity, groceries, fuel, entertainment etc.

4. Add up income and all expenses

Total up all income and expenses. Totalling your expenses and income will help you figure out how much is left for savings and investments. You can use the money left to pay off some of your debts.

Sometimes after subtracting all your expenses from income, you don’t always get a positive figure. You will need to do some readjustments on your budget.

Working on a formula will help you solve this debacle. For example, you can create a ratio on how you are going to split your income.

You can dedicate 10% to investments, 20% to savings and 70% towards your living expenses. It is all up to on how you go about it.

Using percentage will help you to be more strict on your budget and achieve your goals.

5. Use the remaining income to cover investments and savings

Use the remaining amount to cover investments and savings. Research on savings. Find a bank which can offer you savings interest rates that can help you achieve your savings goals. In time you can consider getting yourself a professional financial advisor to help keep your finances in track.

Some companies contribute to retirement so if you are using a percentage system to split your income, the investment percentage may be smaller compared to a person who doesn’t get any retirement benefits from their employer.

What to do next

Keep track of your progress – always revisit your budget to check is everything is going according.

It is a plan that needs to be fulfilled, so it must be regularly revisited. Mark everything that you are doing right and note down everything that you are doing wrong. Correct all that is wrong and maintain what you are doing right.

Create debit orders – Debit orders will save you time and stress. Create debit orders to ensure that you cover your expenses when due.

Talk to your bank or banker and specify which amounts go where and when. Automation is here to make your life easy so make use of it.



Using a budget and maintaining it requires perseverance and emotional intelligence. Discipline your self to achieve the utmost results. In fact, a budget is there to help you meet your financial goals not to destroy them.

If it happens vice-versa then you need to evaluate yourself. Picking up some financial skills that can help you positively. Learn as much as you can about keeping your finances safe.

5 ways to build a budget in 2022
Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted at

Published by
Lethabo Ntsoane