Budgeting can be a drag, right? But it's so important to keep track of your spending and plan ahead.

We often associate financial planning and budgeting with restricting ourselves and withholding some pleasures, but really, it is just a way of accounting for our expenses versus the income received. Just like your bank statement tells you how much you received into your account and what was deducted as you spent it, so does a budget; it is just a tool to help you keep track of your financial expenditure.

Below we have a step by step guide on budgeting and some extra tips for saving money:

Step 1: Calculate your Income and Fixed expenses

If you have a regular income, this is easy. Your actual income is what you have after-tax, pension payments and other deductions. On your payslip, it’s the net salary. It is what you receive into your bank account.

If you do not have a regular income, but you do get some money coming into your bank account occasionally, try to work it out based on your average monthly earnings from the past six months. Or better yet, use the lowest amount you received in those six months as your baseline income.

With the amount that's left over after all deductions and taxes, work out how much you would need for rent/mortgage, water and electricity bills, medical aid, internet, and other fixed expenses. If you do not have all this information top of mind, gather old receipts or invoices, bills, loan statements etc., to help you with the figures. Use Microsoft Excel or Google Spreadsheets to capture your data. This way, you can keep a record, other than using pen and paper that you can easily lose.

Step 2: Get yourself some deals

The first thing you want to do is to subscribe to all online deals and specials relevant to you; catalogues like the Clicks specials will take care of your toiletry and medication needs and help you save. Local pharmacies and grocery stores usually have loyalty cards- and specials set aside specifically for members. If there is anything that will change your life, it is joining as many loyalty programs as you can. The difference in what you would be spending without the specials is huge! In addition to that, there are points you can collect to use as discounts at a later date.

You can also use the pamphlets in your local newspaper to find specials and deals for electronics and household items.

Knowing the specials and deals on offer at your local stores ahead of writing up a budget will help you with your planning.

Step 3: Put aside some savings or have contingency funds

Set aside at least 10% after you have calculated your fixed expenses. It is always good to have extra money building interest in a savings account. Alternatively, you could have money set aside as contingency for unexpected costs, house or motor repairs and medical fees.

Step 4: Your spending allowance

This part might be the hardest part. Tracking each cent spent can be difficult. It might help to have a set amount or a spending allowance you know you can use after covering the significant expenses. With your specials and coupons in hand, write up lists of things you know you may need for the month.

If you can, plan biannually and buy in bulk. Usually, buying in bulk helps you to save in the long run. Grocery items like rice, coffee, sugar, washing powder and cooking oil are cheaper when bought in bulk.

The money you have leftover from buying the necessities, if any, can be used to purchase luxury items or for holidays, entertainment and special occasions.

Extra tips

Fast food: Many fast-food restaurants issue out flyers or pamphlets with deals. These can be found in your local newspaper or the restaurants themselves. Make use of online delivery- most restaurants have specific online specials that run by the day.

Travel and holidays: Look out for travel and reward programs: book travel tickets using travel websites, look online for discounts or deals for car rentals or discounts on hotel bookings and spa treatments.

Once you have created your budget, execute. To keep track of your spending, you can use a spreadsheet or download an app on your computer or cellphone. The first few months might be challenging as you work around your budget, but eventually, you will get the hang of it.