What is a budget?

A budget helps you outline expenses and income over time, whether weekly, monthly or yearly, to help you track how much money is coming in, going out, and being saved.



Why is it important?

Keeping a budget can help you manage your personal finances so that you can save enough within your means to meet your long-term goals.

A popular budgeting method is the 50/30/20 method. This allocates 50% of your income to needs (for example, rent, and groceries), 30% to wants (such as dining out and entertainment), and 20% to savings and debt repayment.

How to set up a monthly budget

Whether you use pen and paper or a spreadsheet, you can set up a budget in 5 easy steps:


1. List the total of your income

Whether it’s your salary at a full-time job, or your freelance hustle, add up all the income you receive and jot down the total.

2. List all your monthly expenses

From rent and travelling costs to groceries, credit card and loan payments, total up all your monthly expenses. Then create a separate column for ‘other’ – for unexpected costs that might pop up occasionally. These costs will vary each month, but try to work out a realistic average.

3. Identify and reduce unwanted expenses

This is where you need to identify the difference between wants and needs and make the necessary cuts. For example, do you really need multiple streaming services? How much would taking a packed lunch to work save on takeaways?Can you afford to add a timer to your geyser, so it only draws power during the hours that you need hot water? Are you making the most cost-effective use of your digital banking options?

4. Punch the numbers

Add up your income and expenses, subtract your expenses from your income, and see if there is a surplus or a shortage. If there is a positive balance, then you’re good to go – you'll be able to sustain that budget. If your expenses exceed your income and you get a negative result, you need to make some changes. You may need to weigh up your wants and needs more strictly.

5. List your savings

If you aren’t already saving or investing every month, start now. Calculate a realistic amount to save from the money you have left over. If you set up a recurring transfer to a savings or investment account when you get paid every month, your deposits will happen before you can miss the money.

How to budget using MoneyTracker

• MoneyTracker is Nedbank’s free money management tool, available on the Money app and Online Banking.
• Get a quick view of your money in and money out. Set up your MoneyTracker dashboard, choose the 
 accounts you would like to track, and give them a name.
• MoneyTracker enables you to create a standard set of income and expense categories and allocates 
 transactions to each of these categories to generate an initial view of your dashboard. You can further 
 categorise transactions that MoneyTracker can’t categorise automatically, or recategorise transactions to 
 custom categories.
• With MoneyTracker, you can set budget limits for each of your main expense categories. From your 
 dashboard, go to Budgets to set up a budget to get started.