Budgeting can be a really pain, but moving out and having your own place means that you need to make sure that you have enough money for the entire month or as long as the money is supposed to last for. So where do we start when it comes to budgeting?
1. How much money comes in a month?
This isn’t one of those steps you can skip, this is something you need to know to be able to budget everything you need for the month.
- Find your pay check or your wages that go into your bank account every month, that way you’re able to be clear on what will be going into your account. If your hours depend on the amount you work each week, start off with the amount you would get if you worked the least, that way you know that you can cover everything and when you do work more, you can put money to the side.
- Check how much you actually take home each month, remember you are most likely going to get taxed on what you earn so make sure that you’re clear. The reason I say this is because sometimes people might say oh I earn £1500 a month and that’s okay, but if you budget for that amount before tax, you can’t say to your landlord or other companies, I don’t have the money right now, unfortunately they’re not going accept that.
- Have you got your pay checks in your house? Check them out how much do you earn, if you have a variety of different amounts on your checks, do an average for the amount you spend, that can really help you to see how much you’re going to need and to prepare yourself.
2. What are your monthly outgoings?
These are all of the things that you need to pay for a month, and you need to be clear on everything. This isn’t going to be easy, but you need to be clear on it 100% do not leave anything out.
- Write everything that you have to pay out for each night down, however remember there can be some outgoings that are every other month, like car tax, or insurance, even things like electricity, so it’s important to make sure that you’ve planned for them. What I would suggest is to make sure you take everything into account and you’re clear, use a spread sheet, make it clear when all payments are made, so every other month, every month, every 3-4 months and so on.
- Use categories, so your food bills, your utilities etc, this can make it clear to you when you’re going through everything that you need
- If there are certain outgoings that you cannot control so things like food shopping, sometimes there are things that you might only need every other month, or maybe you have got things a lot cheaper, either way make a realistic estimate so don’t try to make it as cheap as possible, overestimating your outgoings can be one of the most helpful things because if you save money it’s a bonus, but you have a boundary to stay between.
Now you need to take away all of your out goings from your income.
3. Be money savvy.
- If you don’t have the money then you can’t have it, it’s pretty simple what you need to remember is you need to be able to live, and at the end of the day you need to say to yourself, yes it might be nice to have that new computer game or splurge a little bit but if you haven’t got it, try to save for a few months and then get it, you need to pay your bills and eat first, those are important.
Check your budget regularly
- If you get a pay rise, or you get a promotion, you can amend this budget to reflect that, but it’s so important to make sure that you have enough money and that you can live.
Copy your budget
- You are going to need this so you need to be prepared, you can get them everywhere now, you can do them in excel or if you want you can write it out, either way, make sure that you have more than one copy, you don’t want to have to go all the way back through it right?