Read on for our top tips on making your budget as effective as possible!
Track your Daily Spending
A lot of the time, we don’t allocate money towards the little things, like that take-away coffee on the way to work. In fact, it seems many of us don’t realise we’ve spent this money at all until it comes to checking our bank balance.
This is particularly true with the rise of contactless and Apple Pay, which allow us to spend without thinking twice about it. Maybe consider spending with cash instead so it’s easier to track this ‘invisible spending’.
This invisible spending adds up to a lot more than you might think. It’s a good idea to factor these into your budget so that they don’t take you by surprise.
Account for Infrequent Expenditures
It’s not just about your daily spending, either. You should also plan for things like:
- Haircuts
- Birthday presents
- Car insurance
- MOT costs
Be Honest
Be as accurate as you can about the money coming in and out of your account. You may be able to deceive yourself, but you won’t be able to deceive your bank balance!
Look for Cuts
Have a look at where you might be able to cut down on your spending. Even if these seem like ‘small’ cuts, don’t discount them.
Let’s say you get a £3.50 meal deal for lunch three times a week. This will add up to £10.50 a week, meaning £42 a month. Consider making a packed lunch instead!
Keeping a Balance
It’s not all about cuts, though. Your budget should be something that makes your life easier and more manageable, it’s not intended to make you miserable!
It’s not about squirrelling away every penny you earn and surviving off bread and water every day. Make sure you factor in the cost of things that actually make you happy. If you like going for a nice meal or to the cinema every now again, put it in the budget.
Keeping this balance will also help you stick to your budget, as it won’t be something you resent.
Savings
If you want to reach any particular financial goals, or simply want to build up some savings for emergencies or a rainy day (which is always a good idea), this should be worked into your budget. Savings won’t just appear out of nowhere.
Review your Budget Regularly
Are there any changes that need to be made? Is it too restrictive to be realistic? Or do you need to make further spending cuts?
Maybe you need to factor in new sources of money coming in and out, so make sure you add these.
Click here for our free budget calculator to help you make your budget today!