How to Create a Budget That Actually Works for Your Salary
- I would like to demonstrate how to create a budget that takes into account your salary.
Victor | Temo.name.ng | 4 Min read
In the past I thought budgeting was for those who had money to spare at the end of the month. Then I realized the opposite is true: budgeting is for people who never seem to have anything left over, whatever their income is. If you are actually not aware of where your salary has gone by the 18th, then you are not careless. You're lacking in organization. How I created a budget that somehow withstood real Nigerian life.
Begin With the Number That Does Land.
The problem with most budgets is that they don't get off to a good start, and the reason is that they have the wrong number in their budget. You get an offer letter that tells you that you will make ₦320,000.00 a month, but after tax, pension, and deductions, you get to see ₦280,000.00 in your account. That ₦280,000 is your income. Not the total number. If you have a side income or freelance work, do NOT use your best month to budget. Consider the past 3-6 months and apply your lowest reasonable average. If you're planning for the month that you're best, then all of the slower months are the crisis months.
Keep refining the tracking; don't restrict it.
What you don't see you can't cut. The first 30 days of going without limits are to be spent observing where money is going. Check out debit alerts weekly and classify them within the banking application. I did this and found that I had an almost monthly deficit of ₦15,000 on ride-hailing that I could not recall ever using. Those are the sneaky ones—small transactions via the point of sale, numerous data subscriptions, the “it's just ₦2,000” purchases that turn into a lot by the end of the month. Track first. Judge later.
The 50/30/20 rule is not a rule of law; it is a guideline.
You have probably heard the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings. That division doesn't always last in Nigeria. If you rent, you're eating up half of your salary before you've even purchased your first bag of rice! FairMoney's guide for 2026 proposes a more realistic Nigerian allocation of 60 to 70 per cent of funds for needs, 15 to 20 per cent for wants and 15 to 20 per cent for savings. There is a rule to keep in mind: the 20% savings portion must not be reduced even if the wants have to be reduced. Piggyvest advises a 60/20/20 or even 55/25/20 adjustment, with the rule being to not lower that 20% savings portion even if the wants have to be reduced. The percentages are not as important as the principle: Saving comes after the essentials, and enjoyment comes after saving, but never after eliminating it.
- Pay yourself first!
The one thing I did better than anyone else is that I started saving as soon as I get paid. Not at month-end. But not "whatever is left. Immediately. When you wait to see what is left, there's nothing left. Put any extra money you have into a savings account or savings wallet on the day you receive your paycheck. Willpower is finite. Separation is structural. $5,000 devoted regularly helps to establish the habit, which is more important than the amount of money in the beginning.
- Prepare for the “Surprises” That You Already Know Are Coming”
Car servicing. Annual insurance. School fee installments. Wedding contributions. December spending. None of these is really a shock. They happen every year. Calculate the total cost for the year / 12, and save the appropriate amount each month. When car service costs ₦120,000 yearly, that is ₦10,000 monthly. While budgeting is not the sole way to eliminate panic, it does make it a schedule. When you know your mother's birthday is the day for a gift, then it's not an emergency, is it? It is a line item.
Review Monthly Without Guilt
Ask the following three questions each month: Did I stick with the plan? What rose up that I did not anticipate? What can I change next month? A budget is a tool for a compass, not a punishment. If you've spent more than you should have on groceries because they're so expensive again, it's data, not failure. Move the food line and slice in the less significant places. The aim is not to have a flawless month. The objective is to be aware of your money month after month until you know it so well that you direct it rather than wonder where it went.
One Final Truth
Sometimes it is your income that is the issue, not your spending, as your budget may show. No spreadsheet is going to stop the essentials taking up 90% of your income, even if you plan carefully. However, understanding the gap is certainly a step forward. It lets you know just what you need to make in additional income and prevents you from beating yourself up over a math equation. A successful budget isn't a perfect budget. It's one you can follow through, tweak, and continue to use beyond the end of the first month.
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Victor blogs about money, markets, and the day-to-day economics of living and doing well in Nigeria. He thinks it is important for every person to have clarity over financial matters, not just those who have accountants. More at temo.name.ng.
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