At the centre of personal finance is budgeting. We cant stop talking about it anytime money management is the topic of discussion.

A lot of people have lost interest in budgeting because it is not working for them. There are reasons for that. You can check them here.

However, budgeting is not a rocket science. It is very simple. Though not as ABC, but trust me, you don't need a degree in money management to have a budget that works.

Here are the five simple steps to building a budget that works.

1. Set goals

Before you think of managing your money, you need to identify what is important to you.

This will help you to recognise your needs as against wants. Whatever you come up with will serve as your list of financial goals.

2. Identify your income and expenses

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Once you're able to identify your goals, it is important you take a look at your expenses and income. You'll need to look at your source of income and how you spend it. Identify all the bills you pay. And everything you spend money on every month.

3. Separate needs from wants

When you are spending your money, you either spend it on needs or on wants. It is important to identify and separate your needs from wants while building your budget.

4. Design your budget

When some people think about the word budgeting, they think it involves lots of details and calculations. If this is how you see budgeting, you may not find it useful.

Relax, your budget is the spending plan that allows you to spend according to your means and at the same time help you reach your financial goals.

One thing you must be careful of while planning your budget is to ensure that your expenses are not more than your income.

5. Put your plan into action

This is where execution comes in. Having set goals, identify your income and expenses as well as your needs, it is time to follow the budget plans.

This will require you to be very disciplined in following the budget as you may render the budget useless if you do not track it.