How to Budget Effectively in 2016
I know Christmas was only a fortnight ago, but it’s one of the most money orientated times of the year! I’m notoriously bad for leaving all of my Christmas shopping until the week before Christmas, then being penniless until payday in January. I’m sure I’m not alone there!
So with regards to budgeting, it only seems fitting to point out that setting a small amount of money aside from your wages each month for Christmas shopping would be an effective way to combat the stress of spending all November or December wages on presents etc. and having nothing left over.
Along with Christmas, a summer holiday is another annual event that eats up our money in one go. So again, if you know you are going away, and when you’re going away, set aside a sum of money each month to help pay for that also.
The key to budgeting effectively is relatively simple. Calculate how much you have left each month once the essential payments such as rent and bills have gone out of your account. An easy way to help you do this, is to change all of your direct debits to the same date of the month so they all go out at once, and what is left is yours for the month to do what you want with, without the worry of another payment mid-month.
Another important factor to take on board when it comes to watching your money is to regularly do a little research (every few months or so) to make sure you are getting the best deals you possibly can with regards to electricity and water bills etc. I speak from experience when I say it is too easy to just make the payments each month, partly because you just get into a routine of paying the same amount each month with thought of questioning it, and partly because you can’t be bothered to look for different offers or suppliers. The thing is, if you’ve been paying the same amount on things like this for a long time, there is a good chance that there may be a better alternative on the market that can save you pounds and pounds every month.
So at the beginning of the year (now!) just look into these and do your research to see if you can save yourself some money in the first month!
After the essentials have been sorted you need to take into account what you usually spend each week or month on things like food, socialising, clothes, gym etc. It may take some time but it will be totally worth it if you just sit down and evaluate your outgoings. Do you really need to spend an extra pound on branded products at the supermarket when there are stores own products available? Are you buying food that sits in the cupboard for weeks on end then ends up being thrown out? Do you actually NEED yet another pair of jeans? Can you save money by cancelling your gym membership and working out from home? Can you and your friends opt for nights in rather than nights out?
To save money on things like this you should consider making lists when shopping so you only buy exactly what you need to eat for the week.
I know we all like to treat ourselves to nice, new clothing once in a while, but the £40 you spend on a pair of jeans could easily be £40 extra in your pocket on holiday or in a savings fund.
If you think about it, and I mean really think about it, stripping back on your luxury expenditures and just buying what you NEED rather than what you WANT can save you a lot of money each month. This way you actually can treat yourself every now and then, and appreciate what you’ve bought rather than feeling guilty about money you maybe shouldn’t have spent.
By calculating your outgoings and evaluating what you can cut back on, you may be able to put a little more money aside each month for more important things that will come up in the year to come!
If writing it all down in a little notebook isn’t going to cut it, or if you can’t be bothered doing the math yourself, there are also plenty of useful budgeting apps available to do you money saving for you!
So there is no reason for 2016 not to be the year you learn how to handle your cash and become a budgeting pro.
Written by Katy James