How to Stick to a Budget

If you’re saving for a deposit or have just moved into your new home, budgeting will be at the forefront of your mind. Creating a budget is the best way to keep track of your spending and save money.

We have been looking into tips on how to stick to a budget:

Keep a track of everything you spend. Here are a few ideas of what you should include:

• Household essentials – such as your rent or mortgage, bills and travel
• Clothes, toiletries and leisure – meals out and trips
• Impulse buys and treats – coffees, tech or beauty treatments
• Loans or credit cards

Start by making a note of everything you spend for approximately one month. If you’re buying or moving with a partner, friends or family member you could also talk to your them about the best ways to keep track of what’s being spent – it works best if they join in too.

You can keep track of your spending by:

• Writing down what you spend – spreadsheets are a useful way to do this
• Making a note on your smartphone
• Using a smartphone app – there are several that allow you to calculate the costs quickly

Become more aware

You’ll probably find that once you start keeping a note of what you spend your money on you will end up spending less. Sometimes just being fully aware of how much is being spent and on what means that we spend less on treats and impulse buys.

At the end of the month, have a look at what you’re spending most of your money on and, if it’s not essential spending, see if you can go without it.

You don’t have to give up treats altogether, but you might be surprised at how much small things can add up to. For example, if you buy a daily coffee costing £2.60, that costs over £78 a month or £936 a year. If you make your coffee instead, the money you save could go towards your deposit.

Keep an eye on your bank balance

Maintaining a regular budget can give you peace of mind about how much you’re spending and can make you feel better about life in general.

Check your bank balance regularly to see how much money you have. If you bank online or use mobile banking, you can do this easily. Otherwise you can get a printout of your balance and a mini-statement at a bank cash machine.

Set a goal for how much you want to cut back by (every month or every week – depending on when you get paid) and challenge yourself to do a bit better each time.

Keep to your budget

Once you’ve seen how much you’re spending and where you can make some easy cut-backs, it’s time to draw up a budget. What you’re aiming for is to make sure you always spend less than you have coming in.

To reduce your outgoings use a price comparison website to check if you can save money, eg on your phone, broadband, energy or insurance.

Share the responsibility

You could get your partner involved with keeping to a budget. Sit down together and make a plan that you can stick to. Work out how much spending money is available and agree between you what you’ll each have. Check in with each other regularly – every week or more often – to see how well you’re each doing. That way you can encourage each other to save a bit more.

Think before you buy

Wait for one or two days before you buy something that’s expensive or not a day-to-day necessity. We tend to make much better decisions when we have time to carefully consider whether they are the right ones of not, so talk about it with your family or simply ‘sleep on it’.

Set a savings target

If you don’t already have a savings account, you will benefit from setting up an ISA account. People who save for a specific goal tend to save more than those who don’t, so start by setting a savings goal. Next, work out how much you can pay into a savings account each week or month and set up a standing order. Keep a picture of the goal you’re saving for in your purse or wallet or on your phone, to keep you on track and stop any impulse purchases!

Image by Simon Cunningham and licenced via Creative Commons