Budgeting Tips by Ashley Biglin

Budgeting is the first step towards taking control of your finances.

It is important to know where your money is going and that everything is covered, this is an essential part of saving. Whether you are putting money away for a holiday, a house or Christmas, budgeting is on many people’s minds. Here are a few tips to help you out…

Side note: there are currently two ISAs, a Help to Buy ISA and a Lifetime ISA, which can help boost your savings for a house via 25% government bonuses. However, you need to be quick to open a Help to Buy ISA, as the deadline to open an account is 30th November 2019. For more information on Help to Buy ISAs and Lifetime ISAs, check out our article here.

Create a Budget

Work out your total income

  • Add together all the income you get each month. Make sure you include everything. If some of your income is paid weekly or 4-weekly, you’ll need to turn these figures into calendar monthly ones.
  • To do this you need to multiply the weekly figure by 52 and then divide this by 12. This will then give you a calendar monthly figure to include in your budget.

Make a list of everything you spend each month

  • Using bank statements / online banking, list all the things you spend money on each month.
  • You need to include amounts for things that you only pay for once a year or less often, such as Christmas, car repairs or vets bills.
  • To do this you need to divide the yearly cost by 12 to give you a monthly figure which you can include in your budget. You can then set this money aside until the bill is due.
  • If you’re not sure what you’re spending your money on, try writing down everything you buy over a month. This will give you a clearer idea of your regular spending.

Deduct the total amount you spend each month from monthly income

  • If you’ve got any money left over after you’ve paid for everything you will have a ‘budget surplus’. This can then be saved each month for your whatever you are saving towards.
  • If you’re spending more money than you’ve got coming in, you have a ‘budget deficit’. You then need to look at reducing your non-essential spending (i.e. on leisure activities) to ensure money can be saved. Do not look a reducing your spending on essential spending (i.e. priority bills such as rent or mortgage) as this can result in severe repercussions.

Staying on top of your Budget

To stay on top of your budget:

  • Make sure you are budgeting for one-off things such as Christmas or holidays.
  • Make sure you consider saving some money every month – it soon adds up!
  • Make sure you monitor your bank account regularly, by doing this you will be able to make sure there is enough money to cover direct debits.
  • Check you aren’t still paying for services you don’t use any more (like the gym in my case…)
  • Try using cash to control you’re spending i.e on social nights out or shopping trips. Take the amount with you that you can afford to spend and leave your debit card at home; we’ve all been guilty of tapping our contactless debit cards on every card machine we walk by!

I hope these tips will help you with your saving!

If you need help with your savings and investments, contact us on 01482 219 325 or email [email protected].