We all know the feeling of earning your first salary good and well. Unfortunately, we also remember how quickly it disappears. Unless you’re one of the few who knew how to save expertly from that first salary, you are like the rest of us. Trying to figure out where to spend well and how to save effectively. This is where budgeting comes in. You know, that way of saving money that your parents told you about but you never listened? Well don’t worry, Nedbank has you covered.

Here are the 4 steps for budgeting beginners.

Figure out your net income and your fixed expenses.

Your net income is your salary after all the deductions. Your fixed expenses are your bond or your rent, your varsity fees if you are still a student and things like your car payments.

Find your variable expenses and your irregular expenses.

Your variable expenses are those expenses that could change but probably won’t. Like your cellphone contract, your petrol or your taxi fare, groceries, water and electricity and wifi. Your irregular expenses are those that usually catch you by surprise. These can be your medical costs for when the flu hits you or car repairs from when you had that fender bender where you swear it wasn’t your fault.

Deduct, deduct, deduct.

Deduct all your expenses from your net income to see if you have a lot of money left over, or if you have enough to last you the next train ride to work.

Reassess

Once you have outlined everything and figured out where you are. It’s time to gauge where you might need to change your spending or saving to make your budget the best it can be. Maybe look for a cheaper wifi provider, take a taxi instead of a train, or if you see yourself with a surplus, save more to buy that first car you have always wanted.

For more information download our professional banking toolkit here.