How to determine how much you need as a personal budget

Content provided by a guest contributor.

Deciding on how much you need as an entrepreneur can be overwhelming and dis-empowering too. In most cases, we tend to just ignore the issue of how much we really need to keep living and hope we will be able to pay all expenses at month-end. When you don’t know how much you need, you are really leaving things to chance. It's no wonder we struggle to meet our obligations. We don’t know exactly what we are working towards.

Some entrepreneurs will say, "I don’t need to budget because I don’t have money to budget", which is purely a misconception of budgeting. Maybe, we really need to understand what budgeting is and how does it help us reach the financial goals we set. Budgeting creates a space for you to know what you need and prioritise the money you have. You need to budget because you do not have unlimited money. What you have is limited, therefore you need to plan for it and use it wisely. So, you don’t need to have money to budget, because a budget is about planning for the money you want to have. When you don’t plan for the money you want to have you won't have it because there is no need. Budgeting is a needs list in money form.

Try it. Over the years, clients who have done the exercise of knowing how much they need to live, have said:

  • "It's an empowering exercise."
  • "For the first time in my life I feel I am in charge of my money."
  • "Facing my fears gave me strength and courage to face anything."
  • "I just can’t look at numbers but when I treat it as needs in money form, I focused on the need."
  • "I finally understand how a budget can help me achieve my financial goals."

So where do you begin? It depends – if you have never done a budget, then you need to do a 30-day challenge, where you just record your spending and receipting. I have had clients who have done this and by the second week have realised that their attitudes and money habits were the reasons why they were broke. They were spending money unconsciously and, as a result, their money comes and goes. You cannot keep money you did not plan to keep. What you don’t use or plan for, you don’t keep – it's universal law. You have to use what you have. If you have done a budget before, then you can work out how much money you require to maintain your standard of living each month. Create a personal budget that takes the following into account:

  • Shelter (rent, bond repayment, security, water and electricity, rates and taxes, and repairs)
  • Taxes
  • Transport (car repayments, maintenance, petrol, licence, insurance)
  • Medical aid and healthcare
  • Insurance (such as short-term and life insurance)
  • School fees and/or tuition, including books
  • Household expenses, including nanny and gardener
  • Food and clothes
  • Entertainment and hobby-related costs
  • Communication, such as cellphone, telephone, Internet, data
  • Holidays and other miscellaneous expenses

Knowing what your personal budget is will help when you plan your business budget to ensure that your personal expenses are adequately covered. This will stop you from taking money from the business for personal use.

Download this Personal Monthly and Annual Budget Template from to help you get started on your budgeting journey.

The content in this article was provided by Precious Mvulane, author of Essential finance handbook – 7 basic steps to manage finances.

Precious Mvulane CA (SA), RA is a Chartered Accountant and Registered Auditor with more than 12 years of experience working for the big four auditing companies. After working in finance for 18 years, Precious moved on to become an entrepreneur, starting GAD, an Accounting and Tax consultancy which has since evolved into a training, publishing and development organization that aims to educate, empower and enable people to achieve economic freedom.

For more information, contact:


Tel: 011 465 7078


Average: 1 (1 vote)