How to create a budget you can stick to


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Budgets are a great way to start feeling more in control of your finances and provide a good guide on areas you might be able to reduce your spending. When setting a budget here are a few top tips we have gathered from around the web;

Be accurate
Don’t just guess how much you spend on electric, petrol or eating out. Go through your bank statements for the past 4-6 months and write down exactly how much you spend in each area.

Monthly or annually or quarterly
Depending on how you manage your finances you may have some quarterly and some annual bills. These maybe a MOT, water bill or kids swimming lessons. If you are not paying these monthly (which in the case of car insurance, will save you money) divide the cost to include it in your monthly budget, and put this money aside in an additional saving account.

Little extras
Birthdays, Mother’s Day, Father’s Day, catching up with friends they are all times when we need to spend a little bit more. When making your budget, make sure you include money for these events in your monthly spend. If you have a few events all in one month, do you need to save money from earlier months to help pay for it? Also using cash for these little extras all helps to stick to the budget you have created. So maybe try next time you are on a night out, or buying a for a birthday, have an amount in mind, and pull the cash out for that purpose.

You can make savings
By looking at your budget you can see how much you are spending and see the areas you feel like you could cut down. Look at how often you are using your entertainment subscriptions and see if you can reduce those is a good place to start. If you really miss it, you can always re-subscribe. Also check out our blog on ways to reduce your food & household shop for more ideas. This has loads of ideas on how to reduce your weekly shop.
Other ideas to help you stick to your budget can be taking a packed lunch to work, coffee from home in a travel mug, or seeing if you can reduce your electricity/gas and water bill. There are loads of guides and blogs for tasty cheep packed lunches, and ways to reduce your utility bills.

Be honest and realistic
If you normally buy a coffee or lunch out every day or have 2-3 takeaways a week. Totally cutting these out is difficult and hard. It’s great if you can, but do not be afraid to start small, so cutting down your coffee and lunch out to just Wednesday and Fridays, or having just 1 takeaway a week, can make a difference to your budget. Changing your daily finances is not going to happen overnight, and you can’t expect to stop living just to save money. There will times when your budget goes out the window, by accepting that you didn’t stick to the plan, and you will try better the next day is all part of making a long-lasting change.

When first starting out creating a budget it can not only be daunting but difficult to get right first time, especially if you are trying to reduce your spending at the same time. Try to make time each month to check on how successful you have been, it can help identify areas you need to improve but also give you a great boost highlighting the areas it has worked. Remember it all adds up and even if you are not making massive savings, if you feel more in control, and better about your financial wellbeing, then that is the most important thing.

Stick don’t twist
So you have tried to budget, cut down your spending, but you are still struggling to make it through to pay day? Try a spending diary. Write down everything you spend money on and why you have spent that amount. Every debit card transaction, every bit of cash including all your direct debits and standing orders over a week or if you can a whole month. It is hard work, and to get the most out of it, you have to justify the spend of each item ie, mince – to make dinner, washing powder – to clean the clothes, rather than your £85 – weekly food shop. Justifying each item, does help you really think about why you are spending your money on that item, and highlight the little purchases that add up. You can make sure you add these amounts into your new budget and keep you on track for the next month.