If you want to save for a house deposit, a rainy day fund, pay off your loans and have a little bit left over for your retirement, you're going to need to maintain a budget. And if you're going to do this, you need to know how to make one in the first place.
Feeling like a financial novice who doesn't know the first thing about making a budget, let alone a high quality one? Never fear. The following is a list of certain qualities every good budget should have.
It's detailed and comprehensive
A good budget will keep track of your spending - not just the bigger expenses, but the little things too. That lunchtime burrito? It's noted. The candy bar you bought on your way home? You've got it down. The extra beer you bought at the end of the week? It's recorded for posterity.
By being disciplined about keeping track of your money, you can see where it's going, and therefore more effectively make sure it gets spent wisely in future.
It has a goal attached
Saving is always about meeting a goal. No one ever saved money just because they felt like it. In keeping with this, your budget should be laid out in the service of a specific, defined and actionable aim, such as buying a car. Even very long-term goals - such as retirement - can be broken down into smaller ones along the way.
MOVO offers an online Goal Planner tool that you can use to make the budgeting process a little bit easier. Just remember that you need to know what your goal will actually cost to make this effective.
It discerns between different types of spending
A good budget will distinguish between your fixed expenses - such as bill payments, insurance premiums, rent or mortgage payments - and discretionary spending - the items and payments you make of your own free volition and that change from month to month.
Again, it's all about giving you a clearer picture about where your money is gong and, if you fail to stick to the budget, what the culprit was.