MINTHow to make a budget that works
A step-by-step way to plan your monthly money in Ghana: track your income, sort needs from wants, and give every cedi a job.
Read at your own pace. A video for this lesson is on the way.
Before we begin
Quick answer: a budget gives each part of your income a purpose before you spend it. By the end, you should be able to:
- Separate income, spending and transfers between your own accounts.
- Build a monthly plan that adds up.
- Adjust the plan when actual costs change. We will follow Ama, a fictional shop assistant in Kumasi. Every amount below is a teaching example, not a claim about typical wages or prices. Have a notebook or your phone ready.
A simple explanation
A budget is a plan for your money. It answers three questions: how much comes in each month, where it needs to go, and what is left. You are not trying to spend less for the sake of it. You are deciding what your money should do before the month starts, so it does not disappear by the 15th.
A good budget is short, honest and easy to keep up. It works on a phone, and you can adjust it as your life changes.
Step 1: write down your income
List what you can rely on each month, after tax. This means your take-home pay, or for a business or side income, what you actually receive in a typical month. If your income varies, use the lowest recent month as your base and treat anything above it as a bonus.
Step 2: find out what you really spend
Look back at last month. Use your bank statement, your mobile money history and your receipts. People often forget small items such as data, airtime, transport fares, fees and money sent to family. Group what you find into a few categories.
Step 3: split needs from wants
- Needs: rent or housing, food, transport to work, utilities, data for work or study, school fees, loan repayments and family support you cannot skip.
- Wants: eating out, extra clothes, entertainment, upgrades.
- Savings and goals: emergency fund, a goal like school fees or a deposit, and investing once your safety net is in place.
Step 4: give every cedi a job
Subtract your needs from your income. What is left can go to savings first, then wants. Paying yourself first, by moving savings out on payday, works better than saving what happens to be left at the end of the month.
Example
Ama earns GHS 5,000 a month after tax.
| Category | GHS a month |
|---|---|
| Rent | 1,200 |
| Food | 1,000 |
| Transport | 500 |
| Electricity, water, data | 350 |
| Family support | 400 |
| Needs total | 3,450 |
| Emergency fund and savings | 700 |
| Wants | 600 |
| Buffer for surprises | 250 |
| Total | 5,000 |
Her needs take 69% of her income, which is high, but it is her real situation. She still puts 14% into savings and keeps a small buffer. Next month, she will check her real spending against this plan and adjust.
Try your own numbers in the budget calculator.
Step 5: check and adjust every month
A budget is not a one-off. At the end of each month, compare the plan with what actually happened. Ask which lines were higher than planned and why. Move money between lines rather than giving up. Most people need two or three months before their budget feels right.
Tips that help
- Use separate accounts or wallets for bills, savings and spending, so the money is not mixed up.
- Automate savings with a standing order on payday.
- Plan for irregular costs such as school fees, festive seasons and funerals by putting a little aside each month.
- Keep a small "wants" line. A budget with no fun in it is hard to keep.
- Review subscriptions and data bundles for things you no longer use.
- Build your safety net next. See how much emergency savings you need.
Your turn: follow the money
Kojo in Tema receives GHS 4,000 after deductions. He moves GHS 300 from his bank to his MoMo wallet and later buys GHS 200 of groceries with it. Pause: has he spent GHS 500? No. Moving money between his own accounts is a transfer, not an expense. Only the groceries and any actual fees are spending. Record transfers separately so you do not count money twice.
Now return to Ama's table. Her transport cost rises from GHS 500 to GHS 650. Her income stays the same.
- Find the increase: 650 - 500 = GHS 150.
- Keep the planned savings and other costs unchanged for this exercise.
- Subtract the increase from her GHS 250 buffer. What remains?
Show the worked answer
GHS 250 - GHS 150 = GHS 100. The plan still balances: needs 3,600 + savings 700 + wants 600 + buffer 100 = 5,000. If costs rose beyond the buffer, Ama would need to revise another line. A budget cannot create income that is not there.
Common mistakes to avoid
- Treating a rule as a requirement. A percentage such as 20% savings is only a starting idea. Use a plan you can afford.
- Forgetting future bills. If a known GHS 1,200 bill is due in six months and nothing is saved, set aside 1,200 / 6 = GHS 200 each month, assuming you can afford it.
- Counting borrowed money as earnings. Track a loan separately, including repayments, interest and fees.
- Using business sales as personal income. A trader must first account for stock and business costs.
Put it into practice today
Open the budget calculator. Start with fictional numbers if you prefer. Write down your reliable income, essential costs, flexible costs and one achievable saving goal. Check that the total does not exceed income. At the end of one week, compare the plan with receipts and MoMo or bank statements. Choose one adjustment; you do not need a perfect first month.
Why it matters
Without a plan, money tends to go to whatever is most urgent or most tempting. A budget makes room for what matters to you, such as savings, school fees, a business or investing. It is also the first step before investing, because you need to know how much you can invest without putting your needs at risk. See saving vs investing.
Risks to consider
- A budget based on guesses will fail, so use real figures from your statements.
- A plan that is too tight breaks quickly. Leave room for small pleasures and surprises.
- Borrowing to keep up a budget is a warning sign. Cut a line or raise income instead.
- Mixing business and personal money hides what is really happening.
Key takeaway
Write down your income, find your real spending, separate needs from wants, and give every cedi a job, starting with savings. Check it every month and adjust.
Check your understanding
Choose an answer to see why it works or what to reconsider. You can try every answer. Nothing is scored or saved.
Common questions
How much of my income should I save?
There is no single right number. A common guide is to aim for around 20%, but many households in Ghana need more of their income for essentials and family support. Start with whatever you can manage, even 5%, and build up.
What if my income changes every month?
Base your budget on your lowest recent month, cover essentials first, and treat anything above that as extra to save or use for goals. Keep a larger emergency fund, such as six months of costs.
Should I track every pesewa?
No. Track the big lines and group the small ones. A simple list of 6 to 8 categories is easier to keep up than dozens of tiny ones.
Is mobile money spending part of my budget?
Yes. Include it. Transfers, airtime, data and fees add up, so check your mobile money statement as well as your bank statement.
Sources: Bank of Ghana, financial literacy