According to the Office for National Statistics, average weekly spending in the UK rose by around 9% in the years between 2012 and 2019. The same office statistics show that food and housing make up around 42% of the average Briton’s spending. When you consider that there are a lot of additional expenses that an individual has to cover on a weekly and monthly basis, the importance of budgeting is cast squarely into the spotlight.
Now that budgeting is in the spotlight, it must be noted that it certainly isn’t easy. Most people have good intentions when drawing up a budget, but these often prove difficult to stick to, especially when a new pair of shoes goes on special, a friend’s birthday arrives out of the blue, or an unexpected emergency crops up.
Tips on Creating Person-Friendly Budgets
The trick to successful budgeting is to draw up a budget that is easy to stick to and allows some flexibility with your finances. Your budget needs to be “person friendly”. Below are 6 quick tips on how to do that.
Familiarise yourself with your actual income.
Most people spend money with their total salary in mind, instead of being realistic about how much money they actually “take home” after deductions and contributions. Make sure that you know what your salary is after all deductions – this is your actual income and all that you have available to spend.
Make a list of fixed expenses.
Every month you have expenses that you have to pay. There’s just no way around them. Make a list of these expenses as they form the bulk of your budget. If you can find a way of reducing these expenses by seeking out new providers, do so.
Make a list of variable expenses and start making adjustments.
Variable expenses are those that fluctuate each month depending on how much you use. Think of mobile phone use, heating and cooling, and so on. You can influence these figures greatly. For instance, if you have a tight month, you can use your mobile phone less; reduce the heating in the home, and so on.
Track spending meticulously and start cutting back.
Printing your bank statements each month and going over each expense will help you to realise where you are wasting money and where you need to be more careful. There are numerous budget tracking apps that can do this tracking for you and try to keep you within your budget. Some good ones to look up include Emma, Money Dashboard, and MoneyHub.
Make adjustments to spending using your variable expenses leeway.
If you need to save for a holiday or pay for something extra in a month, make sure that you first and foremost try to mitigate this spend by cutting back on your variable expenses. If you don’t go online for a week to cut back on internet costs in order to save a few pounds towards extra meals in a tight month, or a holiday; that’s a great way to stick to your budget.
Consider a short term loan instead of dipping into cash-flow or savings.
If you have a healthy savings or investment account, don’t be tempted to dip into it when you need to spend a little extra money. Short term, unsecured loans are a great way to bridge the gap in difficult months. This means that your savings and investments stay in place and you can repay your loan over a few weeks or months in small amounts that are easily affordable. Choose your short term lender wisely, such as Multi Month Loans, if you want an affordable interest rate and fast pay out.
A budget is not meant to be a punishment. You still need to be able to enjoy your life and live comfortably, so don’t impose excessively difficult budgeting rules in place for yourself. Make sure that you are aware of your precise financial standing and create a budget that actually works for you, instead of trying to impose a pre-planned budget. There’s no such thing as one-size-fits-all when it comes to budgeting. Take the time to plan your budget carefully and you will find it easier to stick to it.