A budget allows you to figure out where you are at and to help you get to where you want to go financially. It will help you to keep track of your incoming and outgoings. In addition, it will also allow you to set financial goals for yourself.
It may take some time and effort to go through your finances but the end result will be the fact that you can make savings for your household. A key rule is to have a budget that allows you to spend less than you are earning on a consistent basis. That way you can make valuable savings.
This is a process that requires you to set aside some time to go through and identify what you are earning and what spending your money on. It’s a good idea to gather together as many receipts, bills and payslips for the last twelve months as you can before you start this process. That way, you have the facts in front of you rather than basing your figures on guesswork.
Print off twelve copies of our budget planner here. and using your receipts and payslips make a record of your incomings and outgoings for the past twelve months. Alternatively, you may prefer to start now and keep track of your financial records for the next few months so you can assess where you are at and what changes you may need to make.
You need to record as much detail as possible. It should include all the money coming into your household on a weekly, monthly or yearly basis. This should include your salary, benefits or bonuses. You also need to include all your outgoing expenses as well. These figures will let you know if you are already making savings or if you need to curb your expenses.
It’s sensible to have some goals in mind when you are planning a budget. That way you have specific reasons in mind when you are sticking to it. You may be saving for a deposit on a home or for a holiday. Find out how much your goal will cost and work out how much you need to save for it. That way when you are looking at your budget you can calculate how much you need to save and how long it will take you to achieve your goal.
It’s a good idea to stick a picture of your goal somewhere in plain sight to remind you of why you are using a budget planner.
Now that you have some records in front of you need to start creating a budget. Put your balance sheet under the microscope. Where can you make cuts?
Can you shop around to get a better deal on your car or health insurance? Can you plan your weekly food shop more effectively so you can stretch your dollars further? You can often make lots of little savings by switching your repayments on certain bills to monthly rather than annually. These are fixed expenses but you can sometimes reduce the amounts.
Sometimes you will have to look at cutting extras such as magazines or coffee dates in order to make savings. It’s useful to remind yourself of the reason why you are saving when you feel resentful about this.