Budgeting is not always easy, specially if it is your first time facing the real world or, you may never have had the chance to obtain financial help on how to save some money. Many students start university and have no clue on how to manage their savings and expenses, even me, myself was found in the same situation. I ended up spending all my money on food, new trends, entertainment and bills as I moved out of my parents house at the age of 21, and even when I was still living at home I still had no control on how to manage my money and too often I found myself penniless. It took me years to get the hang of it and learn how to save. This post will hopefully save you from committing the same mistakes.
Step 1 – When budgeting, it is necessary to set a goal on how much you want to save and for how long. For example: I want to save at least £6000 a year for 3 years, which means that my target for each month would be of £500. 6000/12 months. (YES, you will have to do some calculations!!)
Step 2 – Make sure that you have a savings account as well as a current account. This will help you manage your money more appropriate and promptly.
Step 3 – I personally created a spreadsheet to record all of my financial data and it made it so much easier. Now I know what goes into my accounts and what goes out without having to check my bank statements.
Step 4 – Make a list of all expenses for the month and find out what you are left with. Each month you will be aware of whether you’ve spent more or less than the previous month.
Step 5 – Now that you know what your expenses are for the month, deduct that from your total income. For example: if you get paid £1,500 a month and your expenses add up to £400, you work out 1,500 – 400 = 1,100.
Step 6 – The money for the expenses should stay in your current account, then you transfer the amount you want to save for the month to the savings account, in this case £500.
Step 7 – The money left over on the current account could be used for petty cash/spending money for day to day expenses.
NOTE: NEVER TAKE MONEY OUT OF YOUR SAVINGS no matter what, unless you are using it for a good purpose such as investing (shopping for the latest trends isn’t one, TRUST!!).
If you follow through with this process every month, you will notice that you will always be able to have money in your account and in case of emergency, you will not have to worry.
For further advice on how to budget or if you have any questions, don’t hesitate to contact me, I am always here to help.
Hope this post was helpful, please rate and leave your opinion.
❤ XOXO ANITA ❤
One thought on “Chapter 1: Tips on how to budget your money”
Aside from actually keeping a spreadsheet record, I have everything else you’ve mentioned (current account, savings account, set amount to save each month WITHOUT touching it), it really does help. But I used my savings for a car and now I’m going to have to use it for a digital piano ='( After that I’m going to save properly again. Good advice here, love it 👌