One of the most important elements of personal finance is to ensure you are tracking what you are spending and that you have a plan to work towards.

If you are wondering where you should start then the first step is to commit to setting up a budget. This can be a daunting task at first but by committing to setting a budget you will need to analyse what your incoming and outgoing payments are currently. By doing this you will be able to see where any gaps are and if you can cut back on any non-essential payments per month.

If you have a partner and have a joint income then you should ideally sit and go through this together to ensure you are both committing to follow the budget.

You may not get the budget spot on first time but you need to start somewhere and over the months you can refine and adjust as required.

When setting up a budget you need to have several categories you are tracking against. The key is to ensure every dollar is given a job and is assigned to a category that you place the money against. You need to also ensure that you are tracking for future payments also so that you don’t get a surprise. An example of such an item would be Christmas time, you need to set up a monthly payment and ensure you are saving towards this throughout the year. Another example you may save against is for your children’s savings accounts.

Here are some category examples to get you thinking along the right track:

• Groceries
• Travel
• Sports
• Subscriptions
• Utility Bills
• Insurances
• Repairs

You can get quite granular with the category lists but really we suggest you keep it minimal as possible at first to make a start.

Also don’t forget to set away some money each month for emergency payments, those things you cannot plan for.

So if you are not already working on a budget then schedule some time to sit down and make a start.