Tips on budgeting
Oct 29, 2019
Budgeting sets the foundation for every financial plan. No matter how much money you’re making, you need to know where your money is ending up each month if you want to have a handle on your finances. Having a budget will give you a clear action plan that will help you achieve the goals you’re working towards, whether it be consolidating debt, saving for retirement or simply just trying to make sure you don’t overspend.
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Before the month begins, budget to zero.
This doesn’t mean you have zero pounds in your bank account, it just means your income, minus all your expenses, equals zero. It’s a good way to start as you’re planning ahead.
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Start with the most important ones first.
Be sure to prioritise your true necessities because once they are taken care of, you can fill the rest of the categories in your budget. Think about the Four Walls (food, shelter, utilities and transportation).
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Pay off your debt.
If you are in debt, this also needs to be considered a priority. It is best to start consolidating debt sooner rather than later, even if you start in small amounts - every little helps!
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Make a schedule that you can stick to.
It could help to put specific dates on some expenses, you may even want to set up direct debits. Knowing what to expect and when to expect it, will relieve you from a lot of stress and improve cash flow.
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Cut up your credit cards.
If you’re serious about sticking to a budget and getting out a debt, the best thing you could do is completely stop using your credit cards. Getting rid of them for good will mean no minimum payments need to be added to your budget and you can focus on the things that really matter.
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Don’t be afraid to trim your budget if need be.
Everyone likes to treat themselves every once in a while, but sometimes things get tight and it’s safer to live within your means. This could mean shopping at discount stores or dining out less, to save money. Don’t forget you can always make adjustments later down the line, when you are back on track financially.
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Have goals.
Whether you’re paying off student loans, mortgage, building up your emergency fund, or simply saving up for something, ask yourself why. What is the reason you are making these sacrifices?
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Track your progress.
It’s great to check your progress from time to time, to keep your goals in sight. Look back on your earlier budgets and see how far you have come, it will encourage you to do more!
