How do I make a budget?

A budget is a plan for your money before you spend it. It does not need an app or a spreadsheet; a notebook works.

Start by writing down what comes in each month: salary, business income, money sent from family. Then list what goes out, beginning with the fixed costs you cannot skip, such as rent, school fees, utility bills and loan payments, followed by the costs that change, such as groceries, fuel and mobile top-ups.

A simple rule of thumb is to split what is left into needs, wants and savings. Many guides suggest roughly half for needs, a third for wants and a fifth for savings, but the right split depends on your income and family. What matters is that savings get a share every month, and that they come out first, as soon as the money arrives, rather than from whatever is left at the end.

Track your spending for one month and compare it with the plan. Most people are surprised by the small daily costs that add up. Then adjust and try again. The State Bank of Pakistan's financial literacy programme runs free sessions on budgeting and saving across the country.