Do you know how much money is in your current account right now? Not a ballpark gestimate but an actual figure down to the closest £10? Or exactly how much money you've spent this month even?
|An example budget spread sheet - pretty in pink and everything!|
Nope? Well if you'd asked me a while back I couldn't either. It's amazing how many of us spend blindly, gritting our teeth as we tap in our pin code hoping to avoid a ground-swallow-me-up card 'DECLINED' moment. The closer to pay day it gets the more real that fear becomes... That dreaded feeling when you're finally forced to log into your online banking to pay a friend for Saturday night's Uber, half expecting to read the word 'Paha!' next to your current bank balance. It doesn't have to be this way... There is hope, it's called a budget.
Once upon a time the word 'budget' conjured in my head images of meagre living. A Scrooge-like existence of dry bread slices for meals and absolutely no social life. What I've realised now is that it actually means peace of mind. It means full control over my bank account and the freedom to buy from the latest Mac collection without fearing that it'll leave me just short of this month's rent and thus out on the streets (with the fleekiest of faces yes, but homeless nonetheless...). Having a clear-cut spending guide makes all of those 'should I be doing this?' moments so much easier, so you can actually enjoy your well earned money without every purchase sending you into a hot sweat. Setting yourself a budget not only eliminates this dreaded account anxiety but it also can help you to see the areas where you can save money when you didn't even realise you were overspending. So, here's how to nail it.
Start with your monthly wage and then deduct any of the expenses that don't change each month, rent, work travel, bills etc. I like to make these a certain colour, in this case pink, so that I know that those are the amounts I can't change. Then in another colour, dark purple here, add all of other things you spend money on each month, food, going out, toiletries etc. See what you have left after everything's subtracted. If you're not happy with the amount left, change the amount you're spending on the purple items until you're satisfied. Keep it realistic, spending £50 a month on food yet £100 on clothes just isn't going to work! Like I said, budgeting revealed some harsh truths about my spending habits but it has really has helped in the long run. Once you've set a budget you'll have a clear idea of how much you can spend and even how much you will save if you stick to it.
|How I plan my monthly savings in my budget|
I also go in at the beginning of each month and plan for any random unavoidable expenses that I know are coming up and anything that I know I'll really want to spend money on. People's birthdays gifts (I actually set aside money every month for this so that there are no surprises for that one I always forget is coming) or a big social event e.g. a social gathering that I'm aware will be an expensive night but don't want to miss for example. Big purchases e.g. holidays should also obviously be planned well in advance so that you can start putting aside a lump sum every month to make them more manageable. Once I have all of this mapped out for the month ahead I can compare this to my normal budget to see if perhaps I need to skip my Saturday Shellac trips in favour of DIY gel nails so that I can afford to treat my mum to a birthday lunch this month.
Once you're happy with the final amount you're saving each month, there's the fun bit - deciding what you'll do with it! I usually put half in my savings account and treat myself to something with the other half as a reward for being good and sticking to my budget throughout the month. Of course if you want to save it all even better, whatever makes you feel happy and motivated to stick to your it. I like to plan what I'm going to spend the excess on at the beginning of each month as an extra incentive to stick to my plan and save. This month I want some new rose gold sunglasses. Keep an eye on my outfit posts here to see if they pop up!
If you're serious about sticking to your budget, it's a great idea to move any of your wages that you intend to save out if your account at the beginning of each month rather than the end as you can't spend what you don't have. Only do this if you really trust yourself, you'd don't want to start with the best of intentions and end up overdrawn but I find the fear of that happening really helps me to spend sensibly.
Finally, to make sure that you remember to stick to your budget, save and email the spread sheet to yourself as an attachment so that you always have it with you on your phone as a guide. I hope this has helped! In part two tomorrow I'll share my top tips for staying strong and sticking to your budget because there's no use making one if you don't follow it! Stay tuned for that.
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x Jade Mercedes Fraser x