5 Tips to help you budget successfully
Insight.Out Financial is a financial planning company based in East Belfast. Managing Director, Jayne Gibson is providing Ulster Life readers with practical advice and tips on how to improve their finances. This month Jayne shares some solid advice that will help you on the road to budgeting success.
Budgeting is about focusing on immediate money issues – evaluating your earnings and outgoings and deciding on what you can change to enable you to meet a goal – growing your savings, paying off debt, and building for the future. Financial planning focuses on what you can do with your money now to achieve your lifetime goals.
The greatest benefit of budgeting is that through consciously deciding where your money is going, you can ensure that your bills are being paid and any essential costs are covered, while having the safety net of cash buffer that can be used for unexpected costs along the way.
Every good financial plan will begin with a budget. Here’s a few tips to help you get started.
DETERMINE YOUR INCOME
Your first order of business is finding out exactly how much money you have coming in each month. This includes your salary, as well as any additional income from part time jobs, sales of belongings online or rental income. Make sure that you have accounted for any tax payable or other deductions to establish your net income. Once you know how much you have coming in throughout the year, you’ll be able to identify what you have left each month, which brings us on to expenses…
Sit down and have a think about where your money is going each month. You probably have more regular outgoings than you expect! Recording your net income, followed by all of your monthly outgoings in a spreadsheet, will enable you to identify essential and non-essential spends and get an idea of where your money is going each month. This will make it easier to highlight areas where you can reduce or eliminate your spend.
SET GOALS FOR YOUR SAVINGS AND PAYMENTS
By subtracting your monthly outgoings from your income, you can determine whether you have excess money to save or whether you need to first identify ways to reduce your outgoings. Keeping a close eye on your spending for a few weeks may help to identify small things such as a daily cup of coffee, which may be minimal in the short term, but in the longer term small costs like this quickly add up. If you are making more money than you’re spending, then you can earmark this amount for savings or investment and to pay off any existing debt you may have.
MANAGE YOUR MONEY
There are many ways to keep track of your spending, once you’ve decided that you’d like to budget or save. These days in particular, the use of spend tracking apps has become really popular. Free apps such as Money Dashboard can be connected to all of your accounts to track your spending, breaking this down into categories. The collated information gives you a clear idea of how much you could save if you changed your spending habits. For managing the actual spending, money management apps and cards such as Monzo, are a great way of managing your money. The Monzo app allows you to section off specific amounts of money within your account for outgoing bills so that it stays separate ensuring you don’t overspend. There are also apps that help you save your spare change by rounding up your spend to the nearest £ and saving the difference. BE
REALISTIC & FLEXIBLE
Be realistic about what you can save, while still enjoying a reasonable lifestyle. Aim to stick to your budget the majority of the time, but allow yourself the occasional treat. Unexpected expenditure such as car repairs or utilities will always arise, and unplanned occasions such as weddings can often mean a new outfit, gifts etc, all meaning more outgoings. But, if you’re sticking to your budget for most of the time, you should be able to make some savings that will help you to reach your financial goals, whatever they may be, and manage any short term unplanned spending when they arise!
Budgeting doesn’t need to be painful. For many, the simple act of taking a close look at outgoings and spending can prompt a change in habit that leads to immediate savings and when it comes to budgeting and saving, it all adds up!
Insight.Out Financial offers independent financial advice and is committed to upholding high professional standards. We provide lifetime financial planning, and this can include pension transfer advice, investment planning, financial and tax planning, personal protection, and business financial planning. Our aim is to help clients to understand and achieve their financial goals.
Insight.Out can be contacted on 028 9590 2280 or via email: email@example.com The company is located at 137 – 141 Holywood Road, Belfast, BT4 3BE.
Risk warning: The value of investments and the income from them can fall as well as rise and past performance is not a guide to future performance’. You may get back less than you invested as investment returns are not guaranteed.