A Budget
A budget is a money plan. It starts with a list (see our sample budget sheet 13kb
pdf) and ends with a tool you can use to get in control of your
money.
There are 4 steps
Step 1
Take a snapshot of your lifestyle
- Gather together as much info as you can about your spending
now. See the budget sheet as a guide to the categories.
- Include all your usual bills, plus food shopping, household,
clothes, travel, entertainment and so on.
- Be honest. The only one you’ll be kidding is yourself.
- Be accurate. The better the info, the more useful it is – to
you.
- You won’t be able to do this in one go, it takes time and
effort. This is the second hardest part of budgeting.
Step 2
Does it all balance?
- Write it all down, add it all up.
- Do a full budget sheet.
- Does it balance with your income?
- Can you afford you?
Step 3
Scrutinise.
- Go through each item and see if you can save money.
- Treat each area of spending as a mini-budget (e.g. your weekly
food shop)
- Ask yourself questions
- What are your priorities? What can you cut out completely if
you had to?
- Can you make savings? Are you being wasteful anywhere?
- Can you get better deals? Are you being ripped off?
- If there’s something you want to save for, where will you get
the money from?
Step 4
Take control
- This is where you take action.
- Make your decisions.
- Plan how you’re going to keep to them.
- Sticking to your budget is the hardest part.
- But your budget isn’t a burden, it’s a means of control.
Martin Lewis is an award-winning journalist, with regular spots
on TV & Radio. His website is MoneySavingExpert.com says
‘the most important thing to do is to understand that your finances
must lead your lifestyle & not vice-versa.’
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