Most people understand the basics of how budgeting works. It’s much easier to keep a handle on how much you’re spending, in order to save or pay off debts, if you allocate a certain sum to each type of expense and aim not to exceed this limit.
However, there are ways that you can improve your budgeting skills further. Learning certain tips and tricks can make budgeting easier and make your money go further. For example:
- Sort out your priorities. Budgeting always starts with a look at what is and isn’t essential spending. Rent, mortgage payments, bills and food are all essentials, while a trip to the cinema, a new TV or taking a taxi when a bus ride is a viable option are all non-essentials. Sit down and divide your spending into these categories, and be brutal.
- Look to the long-term. Weekly and monthly budgeting is essential to helping you manage your day-to-day spending, but you also need to be looking ahead. Will you clear a debt by a certain date? How much will you have in your savings by the end of the year? These are the questions you should be keeping in mind.
- Set goals. As with anything, budgeting is always a lot easier when you have goals to aim at and to motivate you. Set realistic, achievable goals in both the short-term and long-term, and perhaps a little reward for yourself when you reach them.
- Cut out unnecessary luxury purchases, but set aside some funds for leisure. There are lots of things that are non-essential purchases, that if you stopped spending money on would help you achieve your savings goal. Key examples include stopping smoking or cutting down on alcohol, stopping magazine subscriptions, jogging instead of paying for gym membership and cutting down on takeaways and meals out. However, if you cut every single leisure or luxury spend out of your life, sticking to your budget can be even tougher – not to mention making everyday life a bit of a drudge. Be realistic and set aside some funds for the occasional treat, then you’ll have something really good to look forward to.
- Keep a diary of all those tiny purchases. Even the strictest budgeters can forget about tiny expenses, such as parking fees, bus fares and morning coffees. However, these costs all add up and can cause a big hole in your budget. Get into the habit of keeping a diary of every single penny you spend, or get a receipt for everything and keep them all in one place to be added up later.
- Make use of online tools. There are lots of resources, tools and apps to be found online which can make the task of budgeting much easier. So, if your spreadsheet skills aren’t quite up to scratch, save yourself time and headaches by doing a quick search online and using a widely-recommended tool.
Lastly, don’t forget that you can always make use of personal finance to manage a gap in your budget. If you have to, have carefully considered all of your options and you have a clear plan for repayment, companies offering payday loans in the UK could help you to cover an unexpected cost (one not covered by your budget) or bridge the gap until payday. They aren’t something that should be used all the time, but they’re there if you need them.