Let’s be honest: the word budget doesn’t exactly get most people excited. It might make you think of sacrifice, stress, or never having any fun. But a budget done right is actually a powerful tool for financial peace of mind.

A budget is simply a spending plan of action. It’s a way to see where your money is going—so you can take control of your finances, instead of your finances controlling you. It’s not designed to deprive you. It’s designed to empower you.

Yet less than half of Rwandans budget. And many people in Rwanda often run short of money, mainly due to limited assets, modest income, or irregular work. In those times, Rwandans typically turn to mutual support or informal credit to get by. While that spirit of community is beautiful, it also shows why better personal financial planning is needed.

Whether you’re salaried, self-employed, or earning income from a side gig, budgeting isn’t a luxury; it’s a necessity.

Here’s how to build a budget that works in real life.

1. Start with the most important rule

The #1 rule of budgeting is this: You cannot spend more than you earn.

That sounds obvious, but too many people create budgets based on what they wish they had, or what they’re currently spending, rather than their actual income.

Before listing your expenses, calculate your average monthly net income. Include your take-home salary, income from your side hustle (akazi ku ruhande), farming profits, remittances from family members abroad, and any other income you receive.

Then subtract your essentials, such as rent, food, school fees, transportation, and other mandatory obligations. What’s left (if anything) is your discretionary spending amount. This is the portion you can use for other categories you choose, like hobbies or clothes shopping.

2. Always budget for personal savings

No matter how tight money feels, your budget must include a savings line. Not just for community savings groups (ibimina), but savings set aside for your own personal goals—whether that’s building a home, launching a business, or handling emergencies.

Start small if needed: even RWF 1,000 to 5,000 a week counts. It’s less about the amount and more about the habit.

While 60% of Rwandans say they only save if they have money left after expenses. If you wait to "see what’s left,” you’ll rarely save anything. Instead, treat savings as a required monthly expense. Setting aside personal savings upfront, and paying yourself first, is one of seven money moves every Rwandan should make.

Pro tip:

Put your savings in a separate account so you’re not tempted to dip into savings for daily expenses. You can use a separate Mobile Money wallet or open an account with a bank or any of the many local Savings and Credit Cooperatives (Umurenge SACCOs) in Rwanda.

3. Revise the 50/30/20 budgeting rule

A classic budgeting method is known as the 50/30/20 rule:

· 50% of your income goes to needs (food, rent, transport, etc.)

· 30% to wants (such as entertainment, clothes, or gifts)

· 20% to savings or debt repayment

But in Rwanda, this may need adjusting, especially if you have a modest or irregular income.

So, try the 60/10/10/20 plan instead:

· 60% for essentials

· 10% for family or community support such as ibimina

· 10% for personal enjoyment

· 20% for savings and debt repayment

You might be surprised to see "personal enjoyment” in the mix. But including money for simple pleasures—like eating out occasionally—makes your budget more sustainable. If you feel like you never get to enjoy your money, you’re less likely to stick to your plan.

4. Avoid blowing your budget on little things

Most people don’t break their budget because of big purchases. They blow it with small, frequent decisions: riding motos everywhere instead of walking, constant airtime top-ups, or going out for drinks with friends.

Here’s how to avoid that:

Use cash for your "wants” spending. Withdraw what you’ve allocated weekly and don’t exceed it.

Track your spending. Just three minutes a day using a notebook or app like Money Manager or AndroMoney can help.

Leave room for surprises. Add a "miscellaneous” category to cover unpredictable costs like medicine or gifts.

5. Make it visual and personal

Budgeting isn’t just about numbers. It’s about enhancing your quality of life in tangible ways.

So, make your goals visible. If you’re saving for something big — like land, school fees, or a cow for your family’s farm—print a picture of it and stick those pictures in key places: near your budget, in your home, and in your phone to help you stay motivated.

Additionally, personalize your budget. Write down why your goal will improve your life. Share it with a spouse or trusted friend if it helps you remain accountable.

6. Adjust as life changes

Life changes, and your budget should too. Every few months, review what’s working and what’s not. Did food prices go up? Did your income drop or rise? Update your plan accordingly.

Also, don’t beat yourself up if you fall short. Just adjust your plan and try again next month.

Remember, budgeting isn’t about perfection. It’s about intention.

Building for your future

If you want to better manage your finances, don’t think of a budget as punishment. It’s a plan that gives you control, reduces stress, and helps you create the future you want.

When you build a budget, you can actually live with — and stick to it — you’re giving your money a mission.

Don’t wait for a higher salary or a perfect time to begin budgeting. Start where you are, with what you have. Even if you need to start small, just start now.

Lynnette Khalfani-Cox is a personal finance expert, speaker, author of 16 books including the New York Times bestseller "Zero Debt,” and the co-founder of TheMoneyCoach.net. She and her husband Earl Cox are expanding their financial education firm in Rwanda to support financial literacy, economic, and entrepreneurship initiatives.

Money Moves is a bi-weekly column providing practical wisdom and strategies for building wealth and financial security in Rwanda's evolving economy.