Budgets are the balancing of a consumer’s income and expenditure. Start by detailing all the income for the month and then all the expenses for the month. There should be a positive income amount left over. If not then expenses have to be trimmed taking into account Needs – what one needs to live as opposed to Wants – the luxuries/debt. Debt should not exceed 20% of the net income received, after deductions and income tax. Of your gross income 50% should cover all your fixed monthly costs including deductions but excluding debt, 30% should cover all the monthly variable living costs with 20% available for savings and debt repayments.