A budget is a financial plan that outlines how you expect to earn and spend money over a specific period of time, such as a month or a year. It is a tool that helps you manage your money more effectively by setting aside money for your needs, such as housing, food, and other necessities, and for your wants, such as entertainment and travel.

Creating a budget involves estimating your income and expenses for the coming period and determining how much money you have available to save or invest. It can help you make informed financial decisions, stay on track with your financial goals, and avoid overspending or getting into debt.

To create a budget, you can start by listing all of your expected income sources, such as your salary, any investments, or other sources of income. Next, you can list all of your expected expenses, including fixed expenses like rent or mortgage payments, as well as variable expenses like groceries and entertainment. Subtracting your expenses from your income will give you a sense of how much money you have available to save or invest.

It is important to regularly review and update your budget to ensure that it accurately reflects your financial situation and helps you make informed financial decisions.

Each month we’ll aim to bring a bit of humanity and common sense back into the world of finance.