What is a budget?

A budget is a tool to help you live within your means. With a budget you can allocate your money towards what will be spent and what will be saved for the future. A simple budget lists and compares all your income and your expenses to work out how much is left over. A typical example can be seen in the picture below.
Simple Budget Template Summary
The budget shown above was developed with Microsoft Excel and is available for download here. For many people a simple budget such as the one above will do. However, if you want to follow your money more closely, advanced budget software provides features such as:

  • Tracking actual income and expenses against budgeted amounts
  • Charts for visually tracking performance,
  • Ability to update your budget from your smart phone when you make purchases.

Of course, whether you are budgeting with pen and paper, a spreadsheet, or a smart phone with the latest software, keeping a budget is still about sensibly managing money coming in and going out.