This week's post is all about making a budget or spending plan. Some people are put off doing this because they think it is too much work or they don't need one because there is always money left in the bank account. We lived like this for years and finally realised that although it was quite a bit of work to set one up but it certainly gives you more control over your money.
The first thing we did was work out how much money we had coming in regularly. We did not count on intermittent income, just the basic we could depend on every month. This included child benefit but some people keep this separate just for the children. Once you have that figure then track ALL your spending for a month. Give everyone in the house a little notebook or use an electronic one and RECORD ALL YOUR SPENDING ! I cannot emphasise enough how important this is. It is the only way to get an accurate idea about what you are spending in each category. After starting that, use statements and receipts from throughout the year to work out how much you spend on annual events, for instance birthdays and going on holiday. When we first did this I was horrified how much I was spending some months on books. I justified it by saying that I needed them for work, but there were cheaper ways of getting them, like the library !
We still track spending every month and I adjust the budget every 3 months to reflect our actual spend rather than the theoretical one I planned at the beginning of the year. We use the following categories in the budget:-
|GAS AND ELECTRIC|
|CAR INS +tax|
|CAR REPAIRS AND SERVICE|
The Moneysavingexpert website has some excellent advice and templates on setting up a budget and they make a good place to start. You can always tweak it to suit you later on ! Good luck with budgeting !