Try touching your toes from a standing position (please don't send me your medical bills if you hurt yourself!) - you may not be able to reach first time, but if you hold the stretch a bit (which is sore) you will probably get closer. If you try a second time, you'll probably get closer still. Sticking to your budget is similar - in order to make your money stretch, you'll have to put in some work and probably have to bear some pain! So get that calculator or spreadsheet out and let's figure this budgeting thing out together.

When you break it down there are 2 components to budgeting - money in vs. money out. Money in (depending on your line of work) is not typically something you can easily adjust (especially upwards!). If you earn a salary, it is what it is - although if you can supplement your income through other work or smart investing then this is obviously a big plus. So figure out what your monthly income is - it could be as simple as using your monthly payslip amount, or you may need to do a bit more work - if you are in charge of paying your own taxes don't forget to deduct this from what you earn as you still have to pay SARS  what they're owed.

Now look at how you are spending your money. Hopefully what comes in is more than what goes out in expenses! If not, start stretching!

50/30/20 Rule

Food, shelter, utilities and healthcare are your essentials - according to Elizabeth Warren's 50/30/20 rule you should look to spend around 50% of your after tax income on these needs. This rule is a useful guide but everyone is different. Someone that doesn't earn much will have to spend a much larger proportion of their income on survival whilst someone who is better off shouldn't try and spend 50% on essentials if they don't need to - common sense should prevail.

Her rule recommends that 30% can go towards "wants" - this includes entertainment like DSTV, eating out, non essential clothes shopping etc. Again, common sense should be used, the 30% shouldn't be seen as a target if you can spend less on these wants.

Last, but most importantly, she recommends 20% to be allocated to repaying debt and saving/investing. This is the 1 element out of the 3 where I suggest the 20% should be a minimum target. If you can take money out of the other 2 categories of wants and needs and rather use it to settle debt and invest towards your future, you will be all the better for it. Don't buy that car you can't afford or that pair of shoes you don't need, rather use that money to get yourself ahead.

Crunch the numbers

Once you have recorded all your outflows - how do they compare to the above? Is there anything you can easily cut (subscriptions you never use, the debit order whose purpose you can't remember) or impulse spending you shouldn't be doing? Or a rewards programme that you forgot about where you still have credit?

Now write down how you plan to spend your money the following month. As we always suggest to our investors - always pay yourself first, ie. for your savings portion, set up a stop order so that the money leaves your account when you get paid so you are never tempted to spend it.

Now the hard part - you have to try stick to your budget. At the end of the month, record what you did vs. what you budgeted to do - how well did you do? It will never be perfect and there will be bumps along the way but at least you'll have a better understanding of what you're spending on and where you can improve.