What is budgeting? One definition I was given years ago was "a budget is what you live within, when you go without."
Some old English proverbs cover budgeting well
“Cut your coat according to your cloth” and “Look after the pennies and the pounds will look after themselves”
Budgeting is the action of recording your income then allocating this money to each area it needs to go to and then ensuring that you live on what you have allowed.
One elderly lady I knew a number of years ago had 5 different savings accounts and once a week would come in to the bank I worked at and deposit her weekly pension into each one. Of course with bank fees she could no longer afford to do this today.
The only reason anyone sets up a budget is to get what he or she wants. As a generalisation most people don’t consider budgeting unless they are financially in trouble and they then need to manage the money coming in so it can cover everything that needs to go out.
As Charles Dickens said
"Annual income twenty pounds, annual expenditure nineteen pounds and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
There are two main reasons then why budgets are set up:
To save for something special. Usually this is a larger priced item like a stereo, car or house deposit.
To manage the debt burden and repayment program that you are currently committed to.
A useful excel spreadsheet is available to down load, see Useful Forms.
Financial Service Providers can help you manage your debt and set up a budget to achieve your goals.