Budgeting might sound boring, but it’s the foundation of creating healthy spending habits and putting you in control of your future financial goals. With the cost of things like food, clothes, petrol and energy rising much quicker than your wages, it’s more important than ever to budget better this year. But how can you do so? Help is on hand to create a budget in this guest post by Business and Finance Expert Laura Rettie.
Write down the cost of all your monthly outgoings
Include things like;
- Your mortgage or rent
- Your commuting costs – train/car/bus
- Council tax
- Gas & electricity or oil/logs
- Water
- Food
- Broadband/landline
- Mobile phone contract
Work out how much you spend on things for fun each month
For example:
- Eating out
- Days out
- Birthday presents and cards
- Beauty treatments like haircuts, nails and massages
Note down your significant annual expenses
These are costs that you don’t pay for monthly, but you’re going to need to save for each month – include things like;
- Christmas presentsHolidays
- House repairs
- Car repairs
- Wedding gifts
- New glasses
Finally note down all your incomings
- Income from employment
- Income from any savings/investments you have
- Pension payouts
- Child benefit
- Income support
Be 100% honest with yourself when you estimate how much you’re spending. It’s always best to overestimate than underestimate.
Tally up all your regular outgoings and incomings for the year to create a budget, including the big expenses, then subtract your total income from your total outgoings.
If you have money left over, you could look into investing, saving, or paying down interest-bearing debts quicker.
If you find you’re spending more than you have coming in, it’s time to take action and look at where you could either bring more money in or cut back on what you’re spending.
Try to get into the habit of updating your budget on a regular basis to keep on top of your spending habits. There are lots of great free budgeting apps available to help you do this.
Happy budgeting!
This is a guest post by Gloucestershire based Business and Finance Expert Laura Rettie. More thrifty tips coming soon!
