The Game Of Working With A Budget

By January 11, 2017Articles

The best action you can take to have a firmer grip on your personal finance, with an eye on both your present and future circumstances, is to work with a personal budget.

A Budget is an estimation of income and expenses, over a specified future period of time, aiming to meet set targets. (1)


Anyone independent of his or her financial status can set a budget. The process of budgeting is simple and there are multitudes of websites offering practical advice and help with administering spreadsheets. In addition to this, there are no costs involved in making a budget. Yet, many people who would benefit from working with a budget, do not. Why not?

The answer is shockingly simple: they never set themselves one. ‘Budget fear’ is a term used by budget advisers to describe the resistance to get to terms with ‘what comes in and what goes out’- in short, a fear of facing reality! Attitudes such as “money is not important” may be part of this resistance as well.


This resistance needs to be overcome. No genuine budget can be made without a sufficient desire to know what is going on with one’s income and expenses. Often overlooked, though, by financial planners is the reality that – for many people – working with a personal budget can come across as a rather rational and tedious process. A process rooted, essentially, in sacrifice. And who would be interested in that?

A better way is to approach budgeting as by seeing it as an exciting game; a game where targets need to be met and rewards are reaped at the end. It is a simple game that involves only 5 steps. All that is needed is pen and paper (excel spreadsheets easily available on-line could be used as well). The secret of successful budgeting is to see it (and play it) as a fun game, rather than a rational exercise involving nothing but sacrifice. (2)


The first step in the game of Budgeting is to track expenses daily- be these payments made with cash, card or by bank transfer. You will quite quickly come to see that your outgoings fall into categories (groceries, fuel etc.). Knowing these will allow you to divide your tracking sheet into headings and from here, all you have to do is fill in daily amounts. From this data, you will be able to generate a monthly data sheet of your expenditures and then an annual sheet.

Game element: once you have collected all this data, whatever it looks like, congratulate yourself!


The next step in the game of Budgeting is to note- carefully and thoroughly- one’s income. This should include salary; net earnings from business; dividends and interests paid out from investments and bank accounts. It should also include bonuses.

Game element: try to be as complete and as precise as possible. Again, once done, congratulate yourself!


Once you are familiar with your income and the various categories of your expenditure, and these are all recorded in your notepad or spreadsheets, you can begin to assess where you stand. There are several questions which could be asked, depending on what your goals are. Examples are: Is your income just enough to meet expenses, are you running into debt, getting out of debt or are you saving? Are there any items on the expense side higher than you expected?

In your evaluation, make sure you address the small items (e.g. grocery shopping) as well as the bigger items (how much are we saving each year).

Game element: in this part you are more the “observer than the “player”. Try to enjoy this!


Now the game planning can start. This is where you really start to work on your budget. Budgeting is not just simply recording; it is working with income and expenses to reach goals! One’s goals can be many, such as: getting out of debt, meeting all the bills, saving for a holiday, buying a new car, paying for the education of your children or saving for retirement. Planning then means setting an outgoing amount to each category before you start spending or earning. You should plan on – at a minimum – a monthly basis; doing your planning weekly, would be even better.


Often, budget planning focuses on one’s expenses and trying to reduce these. Budget advisers make a useful distinction between two types of expenses: Invariable expenses, such as rent, mortgage payments, property tax and Variable expenses, such as groceries, club memberships and going out for dinner. The suggestion is that there is more scope for reductions on the invariable expenses side of the budget.

Examples are:

  1. Are there cheaper utility providers, providing same quality of service
  2. Can Airfare expenses be reduced by booking earlier?
  3. Would one grocery shop for the week reduce expenses?

Game element: Targets need to be realistic. Rewards can be attached. Example: if I can do the groceries for “X” amount this week, I will buy myself an expensive bottle of wine!


Budget planning can also target to increase one’s earnings by working for bonuses, moonlighting, seeking different employment, working overseas and so forth.

Game element: Targets need to be realistic. Rewards attached are key. Example: if I get this bonus, I will take my partner out for a holiday weekend!


From time to time (e.g. quarterly) it is good to review your planning from a broader perspective. “Am I on target to meet my key goals?” would be one of the questions to ask at this stage. Goals may need to be adjusted based on changes in your work and/or personal life, or in response to different requirements that may have come up.

Game element: A solid plan is vital, but it is still you who is running it. You are “the manager” and try to enjoy this role! It is never too late to start working with a budget. It can be fun and exciting and ultimately, very rewarding. Budgeting can get you out of debt, help you save, free up money for your favourite pastime and perhaps most of all, give you a sense of being in the driver seat. Tools and resources are available online (see suggested websites below).

Last but not least: the best way to enjoy the game of Budgeting is to play it with your partner or a good friend who is interested in you winning the game. Success!

Frank van Lerven CFP®

Author Frank van Lerven CFP®

More posts by Frank van Lerven CFP®

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