The Art of Budgeting

‘Budgeting,’ is a word we are probably all familiar with and maybe even have a good idea of a definition of. However, few of us really put it into practice. How many of us, after all, really spend time each month with a pen and paper working out exactly what is happening in our bank accounts?

I am guilty of not doing until recently. But it’s surprising just how useful a bit of budgeting can be, not only in managing your spending and making you aware of how much you really have, but also in helping you to consider and plan for your financial future.

What’s involved though?

The first step is to go all old fashioned and pull out the pen and paper. You should be writing down absolutely everything you will take as income this month. This will include a full time job, any freelance or second jobs and literally any other source of income. Maybe you’re fortunate enough to get a nice little financial gift from a family member each month? If this is the case, include it!


The next step is to work out what your necessary expenses each month are. Go through all bills, including utilities, your mortgage and so on. Write down each individual expense (ensuring that you have absolutely everything no matter how minor it might seem). Add in a minimum spend for groceries too – make this figure the absolute minimum you can live on if you had to.

You should then total all of your expenses and match this up against your income. Whatever the difference between the two (hopefully the income is higher!) is what you have to spend on yourself!

This has proved a useful strategy for me personally as it has allowed me to work out how much I really have, how much I can spend and, more importantly, how much I can save.

Get out the pens and paper!