Last Friday, I participated in a session hosted by a financial institution. The focus of the Luncheon was to encourage women to be financially stronger and smarter on their journey to fulfilling their goals and attaining wealth. The Presenter asked the following questions ….

• Do you have a plan for spending your money?
• What are your financial goals?
• How are you doing in achieving those goals?

Now frankly, question number one at first sounded a bit queer. Like, who plans to spend their money? I guess any fiscally responsible person would; but clearly, I wasn’t one of them. You can definitely count me amongst that group of females who just happen to have a list of recurring expenses in their notes on their phones. On a monthly basis, I must admit, I simply check to ensure all the requisite expenses are paid. I’ve learned my dear friends, that is not a budget but a mere reminder of the bills that need to be paid. Well, in all fairness, it’s a start!

So my question to you today is: Who’s got a personal budget, whether it be a monthly or an annual one? If you do, I applaud you! For those with budgets, how has that been working for you?

For those without, let me share with you what I’ve learned from the session. After reading this blog, I hope you all will, as I have, start your own financial journal with your goals and a “proper” personal budget.

I implore you to create a budget by listing all your income sources starting with your gross monthly salary. Then list all your expenses whether it’s a loan, rent, utilities, lunch, transportation, school fees, savings, etc.

Having done so, did you receive a surplus or a loss? Either way, read on!

The presenter asked us to do this exercise and I am going to ask you to do the same (please adjust accordingly):

1. Divide your gross monthly salary by 20 (represents the number of work days in the month)
2. Then divide that by the number of hours you work per day e.g. 8 hours. That figure now represents the amount you earn per hour.

If you realise that your expense is more than your income, then I’d suggest that you calculate how much more you need to earn on a daily basis to supplement that excess. The beauty of this exercise is that it shows what you need to earn to be able to take care of all your responsibilities especially when your salary is your only source of income and is NOT sufficient. Please note, if your debt is more than 45% of your salary/income, then you have a problem. You are very much high risks and no creditor will want to do any or further business with you.

I would like you also to calculate the number of days that you work to pay each bill starting with the ones that cost the most. So, for instance, your debt, how many of the 20 days do you actually work to pay your debt. A quick equation is debt total/daily earnings. Use this example to analyze your budget. It helps in identifying the number of days you need to work to secure your future in terms of your savings/goals.

You can also decipher from analysing your budget, the amount of money you’d need to earn daily (or even hourly) to address the shortfall in your income. It might be that you have a skill not being used at your current job for instance baking, social media marketing, hairdressing or simply sales. Put your skill to the test! How about selling birthday cakes or even bath and body works products for instance to your colleagues? Or offering your service on a part-time basis managing a small business’ social media platforms or some part-time job on virtual platforms like Upwork? The question is what can you do to get that second or in some cases, third income? That is definitely something to think about.

It doesn’t hurt to develop AND maintain a budget and personal financial journal of your expenses. It will take you no more than an hour to develop. It will help you to have a clearer picture of the highs and lows in your finances. It makes it more manageable and is very practical. With a budget, you are able to track the areas that you spend the most on and those that you can cut back your spend. For instance, if lunch is costing too much on a monthly basis, take lunch to work and you’d be surprised the impact such a decrease in your expenses may have on your overall financial position. This also helps with attaining your financial or future goals. Once you have an idea of the cost of a house, car, trip to Paris or simply a target of a million in the bank; you know how much you need to save monthly towards that goal.

After all, some of us are doing this for the departments or companies to which we are employed. So why not just apply the same logic and practice to our personal lives?