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It's the end of the month and you are down to your last salticrack. Actually, you threw the box away yesterday, so you don't even have salticracks anymore.

Once again you wonder what happened to that budget (click here for advice from the editor on how to draw up a budget) you set up last month, and then you remember that you lost it somewhere between the sale shoes and the broken hair dryer...

Sound familiar? You're not alone.

Lots of people struggle to keep within the confines of their pay checks, which is why we introduce you to the 35:25:35 principle.

Start by dividing your monthly expenses into three main categories: Household, Finance and Debt Repayments:

  • Household Expenditure

    35 percent of your monthly income should go into this category which includes spending on domestic wages, food, communications, entertainment, security, travelling costs, education, water and electricity, etc.

  • Financial Services

    25 percent of your monthly income should go to long term life assurance products, short-term insurance, medical aid, pension contributions and, if possible, longer term savings.

  • Debt Repayments

    35% of your monthly income should go to debt repayments like credit cards, home mortgage (or rental if you don't own), car repayments, store-cards and any other monthly debt repayments that you might have.

You will notice that 35+25+35 only gives you 95 percent. The remaining five percent should go into an emergency fund, a.k.a. your Rainy Day Fund (click here for advice from the editor on how to set up an emergency fund). This money will cushion you against life's little crisis.

These budget principles will help you to track exactly where your money is going, and help to improve your spending patterns. Remember that budgeting takes hard work and discipline, but it will also reduce your chances of becoming over-indebted.

www.justmoney.co.za