Creating a budget isn’t just about managing your money in order to tackle debt and reign in your spending, it can also help you find a way to spend cash on the things that you enjoy. Make a list of things that make you happy; it could be going to the cinema, buying the latest PS4 game the day it comes out, owning the complete works of Franz Kafka, or just a Friday night take-away with the family. Now have a go at creating a budget that allows you to achieve these things.
Budgeting is basically making sure that you are spending less than you’re bringing in. Simples! Many people think of ‘budgeting’ as depriving themselves, but that certainly doesn’t have to be the case. It merely allows you to know how much money you have coming in each week or month, how much you have to cover all the essentials (rent or mortgage, existing debts, bills, groceries etc.) and therefore how much you have left to spend on the things you love. The good news is that sticking to a budget will give you the peace of mind that comes with knowing you have the essentials covered, whilst allowing you to free up money to spend on those little treats, guilt free.
Our top 10 budgeting tips
If you follow our video tutorial it shouldn’t be too difficult to create a budget, but sticking to one always proves trickier! That is why we have come up with our Top 10 Tips to remember when living on a budget. With these handy hints…you can do it!
- 1. Be honest. Don’t try to skip certain items or underestimate your spending.
- 2. Be consistent. Keep track of your daily spending. The little things that you buy can soon add up, which means you are probably spending more than you think. Keep track of all your spending with our free Spendometer.
- 3. Keep motivated. Regularly remind yourself of the things the budget enables you to do.
- 4. Plan for occasional expenses. Make sure you budget for expenses that only happen a few times a year like gifts, car insurance and trips to the dentist.
- 5. Plan for both fixed and variable expenses. Fixed expenses are things like rent and council tax, and variable expenses are things like utilities, groceries and travel.
- 6. Assess the ‘extra spending’ in your budget. If your budget still doesn’t balance, it’s time to cut back on non-essential spending. Could you have one less coffee shop coffee a day? Or take sandwiches in to work?
- 7. Don’t beat yourself up. Everyone will go off their budget occasionally, no matter how much money is available to you. If you end up going out for dinner with your mates, instead of a quick drink after work, don’t get disheartened, simply revise your budget and see where you can recoup the money moving forward.
- 8. Don’t try to deprive yourself too much. Just like a diet, if you do, you will find it much harder to stick to in the long term! Find a balance between saving and the occasional treat such as that bottle of wine or those new flowers for the house.
- 9. Review your budget every month. This will help you keep on track.
- 10. Have fun! Enjoy spending your hard earned money as long as you’ve made provision in your budget!
If despite all this, you’re still struggling to balance your budget after cutting back on spending and are concerned about the amount of money you owe, it’s important to seek help as soon as possible. Spending more than you earn each month isn’t sustainable in the long-term, and will push you further and further into debt. For free debt advice, speak to StepChange.