Taking the time to budget and plan your monthly spend can help save you lots of money and get control over your bad habits if you’re spending too much. You can put those extra pennies aside and start to plan for holidays and other treats for the future! Read on for our top tips on how to budget and save money.
How do I set a budget?
First of all, you need to get an idea of how much money you get coming in each month and how much money you spend on essentials such as rent, bills, food and other living costs that you have no real control over. There are many online tools that can help you to do this such as this online budget tool – https://www.moneyadviceservice.org.uk/en/tools/budget-planner.
You need to also think about any additional things that you pay for each month, such as clothes, meals out and leisure activities. Write down how much you spend on these things in a month on average.
How can I reduce my costs?
If your outgoings are much higher than your income, then you need to have a good think about what areas could do with improving and set some new targets for what you could reduce down.
If your bills are high, there are many price comparison sites, such as Compare the Market and MoneySuperMarket, that could help you find cheaper alternatives. Quite often there are better energy providers out there, or cheaper car insurance deals, so it’s well worth spending some time on researching this every time your contract is up for renewal.
You may also be shocked at how much you’re spending on meal deals during the week, or on new clothes every month. These kind of expenses could be cut down by preparing lunches at home or buying second-hand clothing instead.
If you’re still struggling to see where you’re going wrong, keeping a diary of your spending could be a great way of tracking what you tend to spend extra money on and when. It could be that when you’re happy to spend extra money on a meal out, when really you could save money by cooking up some food and having a nice night in with a film, for example.
Now that you’ve got control over your spending habits, it’s time to think ahead and start saving up. Make a list of some things that you are hoping to buy in the future, whether it’s a new car, holiday or deposit for a house. It gives you something solid to look forward to and actually save for.
Something to aim for is to have three month’s income saved up for emergencies. Whether you lose your job or have an unexpected bill come in, you’ll always have that back up ready to go should you need it.
So, grab a pen, paper and calculator and get saving!