Budget. Such a powerful word that offers so much!
Your own personal plan will achieve dreams and banish worries!
So if you really want something, take a little time to draw out your plan.
Whether it’s a scrap of paper tucked away in your wallet, accessed in an app or spreadsheet, or stuck on the fridge!
A budget helps you get their faster!
There are three main parts to creating a budget:
- How much comes in, and
- How much goes out, and
- How much have you promised to repay already.
To create your own follow these steps
5 steps to a good budget
Step 1: Gather as much information as possible
Access your internet banking and pull down 90 days of transactions as well as recent unpaid bills.
This maybe a bit painful the first time you do it, but once you get the hang of it you can see at a glance how much money to leave in your account to cover your promises and how much to spend!
Step 2: Figure out how much you can earn
Sure, you have a pretty good idea of how much you’re paid. But what about the hidden money tucked away. Hidden money is in lots of places like disused toys, and other things about the house that you could sell.
What about interest earned in a savings account, or have you checked the unclaimed monies site?
Step 3: Time for maths
Budgets can be as thorough each month as you like, or take an average!
Add up all your earnings and take away the spending. This is the number you’re hoping to improve so don’t worry if it’s much less than you anticipated.
Step 4: Figure out what you really need
Now revisit your spending. Break the items into promises and spending. Promises are those such as existing loan repayments, insurance, telephone and medical contracts. Anything where you have promised someone else that you will repay the contract.
Now have a look at spending. Think about areas where you could cut back – even just cutting back on one coffee a day can add up over the course of a year. Don’t be too harsh though, you need your budget to be achievable and you still want to be able to enjoy yourself!
If you’re a bit overwhelmed and don’t know where to start, there are some very general rules you can try to follow when trying to save part of your salary like the 50-30-20 guide. That is 50% of your money into essentials, 20% into savings, and 30% into lifestyle choices.
Step 5: Set yourself targets
Some people like targets and others hate them! Now you really see how much you could save or repay on a loan!
Tracking your progress will open up more goals and you will achieve many dreams.
Foresters provides finance to help you achieve your dreams sooner. Follow the “I need a loan link” to start today.
Pay attention to how close your spending is to your estimates. If things aren’t going the way you thought don’t be too disappointed – things change and budgets can take a bit of trial and error.
The main thing is you now have a rolling forecast of your money. A bit like the weather, some days its sunny and others not so sunny!