A budget helps you understand your income and spending. This helps you save money and manage your debts.
A budget gives you a structure to help manage your finances. But it only works if it shows what you really need.
Here are some reasons people struggle to budget, and our tips to make it a success.
1. Do not sacrifice to make your budget ‘work’
People often start budgeting when they need to see change quickly.
This may be because they want to:
They may decide to cut back on food, clothing or other basics to make savings.
This is not healthy, helpful or sustainable.
Your living costs are just as important as your household bills. Make sure you can cover them each month.
2. Make space for what makes you happy
Finding a balance between saving money and enjoying life is key.
Your budget should include things you can enjoy or look forward to.
This could be:
- Attending a sporting event
- Visiting family and friends
- Other hobbies
It is easy to lose motivation if you do not have things to look forward to.
Take a look at what you spend each month, and think about what truly makes you happy.
Set money aside to cover whatever it is you love.
Remember: You do not have to deprive yourself to budget.
3. Have a financial goal to work towards
You may know exactly what you want. Or you may just want to feel less worried about money.
Save money for an emergency. Or work towards a financial goal.
Take some time to think about what you want to achieve in the future. For example:
- Do you want to go travelling?
- Do you want to move home?
- Is there a chance you might have or adopt a child?
All of these life events cost money. As with emergencies, it is good to be prepared.
4. Talk to your partner about budgeting
You may be trying to be careful with money but your partner is struggling.
Try to find out why the budget is not working for them.
- Did past budgets not work for them?
- Do they find money conversations stressful?
- Do they find it easier to ignore their problems?
No one likes to feel 'forced' into doing something.
Instead, share your financial goals with your partner. They may feel less pressure if they understand the future you want to share with them.
In the meantime, try making stealthy savings wherever you can. For example:
Are you in charge of the big food shop?
- Try switching to some cheaper items
- Many own brands are just as good as the premium brands
Do you have children?
When was the last time you switched utilities?
Need help putting together a budget?