Laura has a passion for writing about many different subjects that she has personal experience in and always writes for her readers.
The best way to start a budget plan is to go through your outgoings, and write everything down.
Begin with your monthly take home pay. If it differs each month, then write an average.
Next, go through your bank account. This is much simpler to do if you have online banking, but can be done via your paper statements too. Check the dates for each direct debit, and standing order and write them down as follows:
Rent - £550 - 1st of the month
Council Tax - £110 - 3rd of the month etc.
This helps you have a clear understanding of the bills that are due to come out of your account, and on which days.
Next, write down any other monthly expenses that come out of your bank account. Some of these may not be in your direct debit list, i.e Netflix or Amazon Prime. Even these small amounts add up, and should be accounted for if you want an accurate budget plan.
After you have all the bills written down, go through the essentials that you have to buy each month and work out a rough amount for each of these. For example, your food shopping, and petrol costs. It can be easier to work out a week's use, and then multiply it by four or five depending on how many weeks are in the month.
Once you have all of your bills and essentials written down, you then need to find the things that you buy regularly, but aren't part of your essentials. These are things that can be negotiable depending on the month. For me, it is my nail appointments. I have my nails done twice a month, which comes to £50, and I know I can reduce or stop this if I need to cut back. Be honest with yourself, and factor in the things that you do regularly, and that cost you money. If you don't budget for them, then you could potentially miss out on them.
Once you have all of these items written down in a long list, you need to tot up how much it comes to in full.
Once you have done so, take your pay, and subtract your full outgoings from this amount. This will give you the money that you have left over.
With your remaining funds, after all expenses are accounted for, I would advise you to make a savings plan. You can start small, as small as you want to, but it's always a good idea to have some kind of back up. It's usually good to have three months wages in your savings at any one time, which sounds tough, but can be done, if you are disciplined!
If something happens, you will be glad it's there.
Plus, it's always good to have something to aim for, regardless of what stage of your life you are in. For me, I'm looking to get married, and so me and my partner are saving all of our spare money, and it's going in a separate account called Our Wedding Fund. It's so exciting seeing it build up, and you get the satisfaction of knowing you will be able to have what you want at the end of it. Think about something big in your life that you want. It might be a house deposit, a holiday, a new car. Work out how long away you need/want it by, and work out how many months it will take until that time. You can then work out how much you need to put aside each month. It might be easier to set up a standing order, so that they money moves across automatically, and you don't have to think about it.
Saving is one of those things that doesn't seem much fun at the time, but when you get what you want, then you realise it was worth it!
Money For Fun
Once you have paid everything, and put some money to one side for your savings, you might still have some funds left over.
This is the money that you can spend on the things that you don't need, the things you enjoy and the things that aren't a priority. This could be things like clothes, magazines, video games etc. It's entirely up to you.
One of the best ways I find to do this without getting confused with your budget plan, is to take out the money that is your 'fun money' and keep it in your purse. Then you know for a fact what you've got left, and won't over spend on your debit card. It makes it much easier, and you can buy what you like, without worrying about your bills.
- Write a list of outgoings
- Make sure to include essential costs
- Check your bank statements for previous months' outgoings
- Exaggerate costs, rather than under-estimate them, to make sure you have plenty
- Give yourself an aim to save for, and work towards it steadily
- Keep some money at the end of the budget for fun things!
So, there you have it. If you take your time each month, and make sure that you are being honest with yourself about how much you spend on things, you can track your spending, and find ways to be more in control of your finances. You might even be able to save, and buy something that really means a lot to you. There's no time like the present to start putting money to one side.
I hope this gives you some ideas on how to manage your money, and get in control.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.