Raycyne, one of the money experts in our Financial Support team, has some tips to help you get started and make your budget work harder for you.
1. Set yourself a goal
There needs to be a reason why you want to save money. Yes, having some money in the bank in case something goes wrong is good, but it’s hardly inspiring.
If you know that you need to save £1,200 so you can spend a week in Tenerife next summer, it’ll be easier to turn down a cocktail or 2 – knowing you’ll be drinking them on the beach instead.
Set yourself specific, measurable savings targets to ease the pain of any tough decisions you might have to make, and you’ll find out how much easier it is to stick to your spending limits.
2. Put your needs first
Your needs are anything crucial to your physical, mental and financial health. You might “need” new clothes, but really you need to eat, you need a roof over your head, and you need to pay your bills.
You should start your budget with anything you truly need to spend - any money left after that is yours to do what you want with.
If you find that you’re struggling to meet your financial needs, then speak to one of our money experts who can help you supplement your income, get better deals on your bills, and find more ways to stretch your pounds.
3. Save first, then spend
You shouldn’t treat saving money as a luxury. Yes, there are times where you might need to dip into your savings to get you through, but you need something in your savings account to begin with.
Add savings into your budget as an essential “spend” and transfer that money into a savings account as soon as you get paid, rather than waiting to see what you haven’t spent at the end of the month. Moving it to another account takes it out of sight and makes it less tempting to spend.
Even if your budgeted saving is only small, you’ll be surprised by how quickly it will add up.
4. Factor in the fun
It’s important to give yourself some spending money each month – otherwise you might start to resent budgeting. But make sure you include a bit of a buffer when you’re setting your fun budget too.
We’ve all had those nights out that get unintentionally expensive, or events that pop up out of nowhere, but if you give yourself a little more than you think you might need then you won’t be adding financial stress to your headache!
This is your money to do with what you want, so if it’s going to make you happy – to quote Tom and Donna – treat yo’ self.
5. Get appy
There are countless money management apps available, so you might as well use them to help stay on top of your budget.
Lots of them will help you find better deals or extra savings so you can cut your spending without cutting back on your life.
6. A budget is a living thing
You should be reviewing and tinkering with your budget regularly. If you’re constantly over-spending in one area and under-spending in another you may want to adjust the way you’ve allocated your money to different things.
Look at your budget for the month ahead to include planned, irregular spending such as buying schoolbooks or presents. If you need to spend money you normally wouldn’t, it might mean tightening your belt a little that month to meet your savings goals.
7. Don’t be too hard on yourself
Overspending is going to happen whether you’re a seasoned budgeter or not, so there’s no point beating yourself up over a little slip here or there. Some months you’ll come in under your target, and some might be a little more expensive – the important thing is you have a plan and you’re trying to stick to it. Happy budgeting!