The idea is to have more money coming in then going out. Although this is a daily struggle, there’s small changes you can make to look after the pennies, so that the pounds look after themselves.
Why do you need to budget?
You should always watch your money, even when you feel you’re earning enough to splurge however there may be an initial reason why you need to budget; you may have a big event coming up such as a wedding or a holiday, alternatively, you may have just lost your job and finding it hard to provide for your children. Whatever the reason, good or bad, remember, everything is temporary. You can enjoy yourself without spending a huge amount, you just need to be careful.
Step One: Make a list
Sit down and understand exactly where your money is going. Start by writing out what necessities you have. Some of these will be: housing, phone fees, food, and transportation. When you have written down your monthly outgoings, you can work out how much you have left over and ultimately save.
Step Two: Set goals
Do you want to save your money or just cut the cost? Whatever you need to do, set some goals to get to. These goals have to be realistic, don’t set a goal of saving more money then you make, when you could simply put away £5 every week. This can give you structure to your spending and allow you something to work towards.
Step Three: Use Visuals
With your goals set, you may feel overwhelmed by using cards. At this point you should take out a weekly amount for spending and stick to it. Using mason jars to see how much you are saving and spending can show you how far away you are from your goals set.
Step Four: Cut Costs
Although there are plenty of luxuries you may use such as getting that new top you decided you deserved or even treating yourself to a cheeky night out on the town, do you REALLY need that gym membership you have used once in the last 2 years? Close that account and walk to work instead. Saves you a membership and petrol.
UK Households can save hundreds by switching utility providers for example, Moneysavingexpert.com suggests ‘our research suggests the price cutting trend has reversed, and the cheapest deals are disappearing - likely due to Brexit and the weak pound. Back in May, someone with typical usage could lock their energy for just £724, and there were five firms offering tariffs under £750 a year. Now, the cheapest fixed deal is £770 for a year’s usage.’