How to Create a Budget (and Actually Stick To It)
Being able to create a budget can be an easy enough task. Whereas, actually finding the time or patience to stick to a budget is no easy task. However, it can be enormously satisfying managing to stick to one.
You might need a budget for numerous reasons. But we’re here to help you create a budget and actually stick to them when it comes to your long-term financial goals. No matter your age, or income, having a defined budget can be something that can benefit you for the better.
Whether you’re on the brink of bankruptcy, examining your mortgaging plans, or suppressing your spending, we’ve got you covered. Read on about our tips for managing your money.
How to Budget For Everyday Life
How you budget is totally dependent on your unique circumstances, needs, and financial goals. Whatever stage of life you find yourself in, read on for my tips to managing your money like a pro.
If you’re the average person looking to take charge of your finances, here are the steps you need to take to get on the path to success.
1. Track your income
The first step in creating a budget is understanding where you are right now. Take the time to understand all the money you have coming in. Be sure to double-check that it all matches what you should be getting. In addition to your day job, do you have any other income on a monthly basis? Do you have a side business that brings in money? Consider these income avenues if they bring in steady cash flows.
2. Know your monthly bills and expenses
Write out all your recurring monthly bills, even the ones that are bi-annual or quarterly. This could include your monthly rent or mortgage, utility bills, mobile phone bill, broadband bill and any known medical bills. This will definitely help you manage and you’ll be able to see where you need to re-allocate your money.
3. Be realistic with your goals
Don’t expect to be saving large amounts of money right away. Start small, and build up to more. If you want to trim some areas in your budget so you can pay down debt or save for an upcoming vacation, good for you. However, it’s important to make sure your budget is still realistic. Don’t cut back your food budget so much that you’re eating rice and beans every night or throw out your whole entertainment budget and resign yourself to life as a hermit.
4. Live within your means
Review your expenses and make sure they’re in line with you make. If you’re spending more than you make, it’s time to reassess what you are spending. Spending less than what you make is the definition of “living within your means.” We want to make sure that you’re not overspending on anything. It is also good for seeing where you could cut costs on certain things.
5. Use envelopes
Not using your debit or credit cards will help you stick to your budget. You’ll be more intentional about what you purchase and how much you want it or not. Using cash for your weekly errands and expenses will make you consider if you really need that latte or if you would rather add it to your savings account. You put cash in an envelope weekly or monthly for certain spending categories (like clothing, food, etc.), and once the money’s gone, it’s gone.
Having Serious Money Issues?
All in all, being able to create a budget could be just the help you need when it comes to your financial problems. However, if you are having serious money issues, you can find advice from the Money Advice Service at any time.