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How to start budgeting & saving

كيف تبدأ وضع الميزانية والادخار
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Do you ever find yourself thinking – where does all my hard earned money go? Budgeting and saving money doesn’t come naturally to most of us. As humans, we’re hardwired to want things – now. It’s called instant gratification, and it’s a powerful force. But although the word “budget” is often associated with restricted spending, a budget doesn’t have to be restrictive to be successful.

What is a Budget?

A budget is a plan for your spending during a set period – usually a month. It should be designed based on your income, ensuring that you’re spending less than you’re earning.

Needs vs Wants

Before creating a budget, it’s essential to understand the difference between your wants and your needs – which varies between person to person. Once you’ve categorized them, it will be easier for you to spot which areas you can cut down on (usually your wants), and which areas are non-negotiable (usually your needs).


These are things that are not essential for your survival or wellbeing, which you choose to buy. Wants are definitely not bad – in moderation, they nourish important parts of your life, such as connecting with loved ones, having fun, and pampering yourself. Some examples of wants are:

  • Ordering take-out
  • Shopping for new clothes
  • Music & streaming subscriptions
  • Travel


These are your living expenses, which are essential for the wellbeing of your health, family, and job. Some examples of needs are:

  • Groceries
  • Rent
  • Medication
  • Transportation
  • Utility bills

Where is your money going?

A budget can help you spot areas where you’re spending more than you realize, so you can put it to better use elsewhere. It can also be designed to allow you to splurge in certain areas and achieve your financial goals. Before you design your budget, it’s important to have an idea of where your money is currently going.

1: Calculate your total monthly income: 

This would be your salary post-tax, as well as any other income streams you may have, such as interest income, rental income, dividends, government aid, etc.

2: Compile your spending for the last month

Collect your bank statements, receipts, and subscriptions, and any other proof of payments within the last month, and write them all down in a list. Next to each purchase, write down whether this is a ‘want’ or a ‘need’, and calculate the total for both.

3: Look at the total:

Subtract your total expenses from your total income – what is this number telling you about your financial health? If your income is higher than your spending, you’re already on the right track! And if your spending is currently exceeding your income, it’s nothing a budget can’t fix.

4: Your current split between wants and needs

Divide your total spending on ‘needs’ by your total income, and repeat this for your total spending on ‘wants’. This will give you an idea of your current split between them, and help you design a realistic budget moving forward.

Pro tip: You can also use our budgeting tool. It will help you set your monthly budget and track your spending with ease.

The 50/30/20 Rule

The 50/30/20 rule is a guide to help you split your budget using three categories: needs, wants, and financial goals. The rule suggests that you split your budget in the following way:

50% on needs – eg: food, utilities, rent

30% on wants – eg: cinema tickets, Netflix, dining out

20% on financial goals – eg: saving & investing

If you’re earning just enough to get by, you might struggle to save 20% of your income regardless of your spending habits, especially if you’re supporting a family. However if you’re making a decent salary and don’t have to pay rent, your split might look like this: 40/20/40. There is no ‘one size fits all’ approach when it comes to budgeting – you can adjust the percentages based on your personal circumstances.

Wherever you are today, it’s a good idea to start measuring and planning your money. This can help build strong spending, saving, and investing habits, putting you on the path to financial freedom.