Who needs one of those?….Wellll if we’re honest we all do actually.We live in a world where money seems to be ‘the be all and end all‘, but wouldn’t it be great if it didn’t have to be?
Well one way you can stop worrying about money so much is by having a Budget. It takes the stress out of bills/debts or savings because you know you already have everything accounted for and so you can spend time on the more important things.
I’m going to share with you how Me and my Husband personally manage all of our expenses and how you can too! (Bear in mind this is super easy to do! the hard part is STICKING TO IT!)
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So here’s a step by step guide to help you start your budgeting adventure:
1. Work out your Monthly Expenses
That’s right, go grab a pen and paper, and sit down with your spouse (if applicable) and together work out every bill that needs to be paid in a month e.g. Rent, Car Insurance, Pet Insurance, Electricity, Mobile Phones, Internet, TV etc.
2. Other Miscellaneous Payments
Now include in your Monthly Expenses anything else you need to spend money on during the month that aren’t necessarily ‘Bills’ but still something you must spend money on, such as Groceries, Petrol, Clothes.
3. Add up all the Monthly Expenses
Okay so here’s the scary part, total up all of the amounts you’ve written down and minus it from how much you earn in a month. Hopefully you’ll find that you have some extra money left over. If not, then changes need to be made. Start by cutting back on unnecessary expenses -do you really need a new shirt every week? And maybe consider using public transport instead of driving if you can, or even just cutting back on how many journeys you make in the car to save on petrol. Simple changes can make a big difference.
For example, I used to buy waaaay to much food every time I’d go grocery shopping for me and my husband. Even worse a lot of it went to waste! So to make changes I cut back and started meal planning, so now I know what and how much to buy. I even make extra portions some nights so I can freeze it and reheat it next week.
What can also make a big difference is doing one big shop a week instead of loads of smaller trips, which saves money on food and on petrol!
4. Save, Save, Save!
So once you have your monthly expenses equal less than your total income then you’re on the right track! All you have to do now is work out a system that makes you save as much as that extra cash as you can! This will help you stop living paycheck to paycheck and build up a healthy amount of savings for those unexpected bills.
What sort of a System should I use?
Well ultimately you need to find a system that works for you, it may take a few goes to get it right, but remember it’s not successful just because in theory you’ll be saving loads, the key to success is using a system that actually works in practical terms.You could in theory work out that you could be saving 200 bucks a week, but in practice it puts you under too much of a strain and you give up and go back into old habits. However if you set your goal to 100 and gave yourself more leeway you’d be more likely to see positive results, saving may take slightly longer but at least its effective!
Here’s how we stopped living Paycheck to Paycheck!
Okay, so the system that me and my husband use is that we have three bank accounts each, a Joint Account (where our bills come out of) our own Personal Current Account (where our Pay goes in to) and a Personal Savings Account (for the money we save each week).
Once you know how much you need a month for your expenses, divide it by 4 for each week in a month, call this your Weekly Expenses.
Each Pay Day me and my husband put aside our Weekly Expenses into our joint account. We leave the rest of our pay in our Current Accounts and our goal till our next Pay Day is to see how little we can spend in our Current Accounts.
Then when the next Pay Day comes we move any remaining money from the last week into our own Personal Savings Account then Move our Weekly Expenses from our Pay for this new week into our Joint Account. And so the saving game starts again, to try and spend as little as we can until the next Payday.
In effect we pretend as if we are living paycheck to paycheck although in reality we are building up a separate savings account without really even realising it!
This is what works for us because some weeks we need to spend more and others less which of course is normal! A budget shouldn’t feel restraining, and if it does, then you may have to go over your expenses again and work out if they are a ‘need‘ or a ‘want‘. A budget should give you peace of mind that you have all then money you need to cover your bills and should help you get on track to building up some healthy savings.
But remember money isn’t everything
It’s true! Money isn’t everything! This should simply help you take debts and bills off your mind so you can go enjoy life a little less stress free! Rethinking your view on possessions can really help you if you’re struggling to stop spending. Even if you have all the latest gadgets or the most fashion forward clothes, that won’t result in happiness but understanding that money is just money can make you focus on the more important things. Budgeting can help you learn to live within your means and help you understand the real worth of money and help it go a lot further even when you’re living on less.
Hopefully this has giving you some insight in to how to make a budget that works for you. At the start it may be difficult but the key is to stick to it! It’s like a diet, the more you stick to it the more you see changes! So keep working on it! If you have any budgeting tips that work for you then let us know in the comments!