Tips from Anne - Budgeting
What goes in a budget?
Start with these five steps, and remember that you need to be consistent with the timings; for example, don’t mix up weekly spending with monthly income.
- Gather as much information about your regular income as possible, including wage slips, benefit statements, pensions, any board you receive from lodgers, and child maintenance. Remember that overtime, while handy, might not be a regular income
- Make a list of all your priority outgoings, such as rent, council tax, utilities (gas, electricity and telephone), hire purchases, and annual costs such as car tax, MOT and insurance
- Check your direct debits and standing orders by checking with your online or telephone banking service or popping into your bank. Are there any that you can cancel, to save money?
- Get an idea of your essential expenditure by checking your recent bank statements to see how often you’re spending and what you’re buying. Don’t forget extras that might not be recorded on a bank statement such as haircuts, or milk and newspaper deliveries. Again, is there anything you can stop spending money on?
- Write down your non-priority outgoings – the loan and store card repayments, and the credit card bills. In essence, any repayments based on a credit agreement
How do I stick to a budget?
This is the hard bit – how do you keep filling it in, day after day? It depends on you, and how strong your will is. Try different methods to find out which one works for you. Are you motivated more by earning rewards or avoiding penalties?
However you go about compiling it, you have to ensure your budget is always an accurate picture of your personal finances.
- Remember to get paper receipts whenever you take money out of a cash machine or the bank and record these in your budget as soon as possible
- Keep every receipt from the shops and put them somewhere where you can’t avoid them, until you update your budget sheet
- If you buy something online try to record it in your budget straightaway. Online budget tools are especially handy for this
- If any repayment rises or falls, keep a physical reminder of the change until you’ve changed it in the budget
- Keep your budget sheet where you can see it and where it forces you to add to it. For example, if you’re using an online tool put your budget as your browser.