The thought of living within your means doesn’t have to mean missing out. And it certainly doesn’t mean endless dinners of ramen noodles or beans on toast. By using some of these budgeting tips, you can keep track of your spending and boss your budget.
Learning how to budget is the first step in talking control of your spending. It helps you align your money with your life goals and remove any unnecessary financial anxiety that comes from not knowing where your hard-earned dollars are going.
There are plenty of tools to help you get started, like our budget planner, just punch in your outgoings for things like living expenses, utilities and bills, and it will help you determine the best way to divide your money.
To help you on your way to becoming a budget boss, check out these five budgeting tips:
1. Know exactly where your money goes.
When it comes to budgeting, the only way to rein in spending and maintain an accurate budget is by understanding exactly where your money goes.
If you’ve got a SpendME Transaction Account with us, set up those spending limits. Alternatively, keep a spending diary for a couple of weeks or use a money-tracking app to get a clear picture of where your coin is going – those Friday night cocktails or a cheeky ASOS purchase can really add up.
2. Ask yourself if you really need it.
Impulse buys and ‘treat yourself’ moments may feel good at the time. But it’s likely the thrill will soon wear off, leaving you lumbered with the cost (and an unwanted case of the guilts).
So, make a habit of taking a breather whenever you’re tempted to make an unplanned purchase. Ask yourself if you really need the item. Even if it’s within your price range or on sale, walk away and plan to come back later. Just give yourself the opportunity to pass over a purchase you could regret buying later.
3. Look for ways to cut back without too much pain.
One of the benefits of using a budget is that it can highlight areas where you can save.
If your budget shows you’re burning cash on things like dining out, try having friends over for a more affordable pizza night. Look for ways to cut regular bills too – check to see if you’re getting the best deal on your phone or electricity plan for instance. Even small savings can quickly add up.
4. Review your budget frequently.
As you get used to living within your budget, it’s important to review it regularly to make sure it works for you. Regular reviews every few months will help you sharpen your budget to match your actual spending and lifestyle costs.
It’s important to review your budget when you:
- Get a promotion, pay rise or new job (go, you!)
- Start planning a wedding or big holiday
- Approach retirement
- Have a baby or start planning for a family
- Get divorced or any other major lifestyle change
- Move house or see a change in rental or mortgage payments
Budget reviews can make sure your budget isn’t outdated and reflects your current income, expenses, and goals.
5. Allow for some fun.
Just like a restrictive diet, if your budget is too strict, chances are you won’t stick with it for very long – so it’s important you allow for some fun.
That doesn’t mean keeping up with the Joneses or splurging regularly. Rather, it’s about making adequate room in your budget for lifestyle and leisure, and the things that make life enjoyable, such as a night at the movies or a lovely meal out. And there are still ways you can enjoy yourself while scoring a sweet deal, too. Check out our list of wallet-friendly ways to have a good night out for some inspiration for your next outing.
Start budgeting today.
Follow these five simple strategies to help you avoid budget burnout. And remember, if you blow the budget occasionally, it’s not the end of the world. Just be prepared to fine-tune spending elsewhere until your budget is back on track.
What’s most important is you start taking notice of where your money is being spent, so you can make sure it lines up with your financial goals and values. Then once you’ve nailed general budgeting and living within your means, you can look to other budgeting strategies like bucket budgeting (a modern version of envelope budgeting) to level up your savings game.
Watch your savings stack up with SaveME.
With no monthly fees or confusing criteria, you’ll be crushing your savings goals sooner.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.