Is it possible to make a budget work? Make a budget work for you!

The simple answer is yes! It will take discipline and effort on your part but it will be worth it in the end! So, if you want to know how to keep track of your money then read on.

We’ve all heard the old saying “Rome wasn’t built in a day” and it will take time to get to grips with budgeting your money, but the following steps will definitely help:

Make a note of everything you spend.

We do mean everything! You’ll be amazed at how quickly spending can mount up on seemingly small things. So every coffee, drink, newspaper, bar of chocolate etc, note it down. You may want to carry around a small notebook or use the notes facility on your phone, or perhaps you would prefer to use an app on your phone – there are many around and some include free budget planners. But however you choose to record your spending the important thing is that you do it regularly, ideally for a month. You cannot hope to prepare an effective budget to keep track of your money if you don’t have a realistic idea of where it all goes!

Draft a realistic budget.

Include everything. Make a list of everything you spend money on every month – rent or mortgage, all your bills – including phone bills and credit card repayments, car or other transport costs, food and drink and everything else you recorded last month. Also make a list of all the money you can rely on coming in such as wages, allowances, benefits etc.

Analyse your budget.

How does it look? For most of us there is a mismatch and there is not enough money coming in to supply the money going out. This is where things get difficult because to stick to your budget you have to make those two amounts match. So either you need to increase the money coming in or reduce the money going out. Too many of us try to do this then give up and start using credit cards to pay bills or buy shopping, but this is not the way forward as you will only be increasing your debt and making things worse. Credit cards should only be used in a genuine emergency. The sooner you commit to sticking to a budget, the sooner you will get yourself out of debt and into financial freedom.

Make a budget work

As we have seen, there are only two ways to do this: increase your money coming in or reduce your money going out. The choices you make will depend on your individual circumstances but here are our Top Five Tips for each of these two goals:

Increase the money coming in:

  • Take on regular additional work for example evening or weekend bar work
  • Offer a paid service such as babysitting or cleaning
  • Join a franchise to run events such as cosmetics or household goods parties
  • Sell some of your goods online or locally
  • If you are creative start making items to sell in local craft fairs

Reduce the money going out:

  • Question the necessity of every item of expenditure – if it’s not essential then it stops!
  • See if you can get things cheaper eg switch your energy or phone providers.
  • How much of your weekly food shop ends up being wasted? Shop little and often instead.
  • Make staying in the new going out! Team up with friends to entertain each other and save money.
  • Start trading skills with friends to help each other do jobs rather than paying someone else to do them.

You may also find it helpful at least to start with to try and operate on a cash only basis. If your budget tells you that you can only spend a certain amount this week then take that amount out in cash and you have a visible daily reminder of what you can and cannot spend.

Re-evaluate as you go along.

If you rigorously follow the above steps you will find that after a few months things do get a little easier. You will be more familiar with how to keep track of your money and will find that economising becomes a way of life. You will become more confident and effective at budgeting money and may even be able to help others do likewise! If you have been disciplined about not using your credit cards you will find the repayments are reducing, leaving you with a little more flexibility in your budget. Now would be a good time to start putting a little money aside each month as savings so that if a future need arises you will have money available rather than having to seek a personal loan and sliding back into debt again.

Good luck with budgeting your money! We hope that this article will help you to get started and that by learning how to keep track of your money you are able to get things under control and build a firm financial future for you and your family.