5 simple budgeting tips
Do you have a personal budget? This article features plenty of practical budgeting advice and some key benefits of budgeting, as well as five simple budgeting tips to help you get started.
Learning to budget effectively is essential in gaining control of your money and achieving financial freedom. Here are 9 key signs it’s time for you to create a budget and some tips for where to begin.
1. you're buying impulsively
To get over this issue, think about a luxury purchase for at least a month before you buy it, as you may change your mind in the process. Use the 50-30-20 rule to set aside a sensible amount of money for living costs, wants and savings.
Having a dedicated budget will ensure you're not overspending each month and the luxury purchases you do buy will bring you more satisfaction if they're less frequent!
2. you don't track expenditure
If you want to stick to a budget, you’ll need to track every transaction you make.
Many people forget to factor in small purchases such as coffees or work lunches into their budgets but these small costs can add up to a considerable amount!
3. you're in debt or rely on credit cards
If you’re struggling to get a hold of your finances and regularly find yourself in debt, it’s time to start a budgeting plan. Even starting off small and paying off manageable chunks of your credit card will help to begin the process. If you're in debt, our support advisors are here to provide dedicated financial advice and talk you through your options.
4. your job situation has changed
If you’ve recently lost your job or had a promotion, it’s important to adjust your budget in line with the changes to your financial situation. Focus on sticking to this new budget going forward and make any tweaks if your salary changes.
Here at caba, we have dedicated support if you're going through challenging situations in the workplace such as redundnacy or a career change.
5. you don't update budgets for inflation
The cost of inflation is constantly changing, so it’s a good idea to increase or decrease your budget plan according to inflation rates to ensure you have enough money for all your outgoings.
Making slight adjustments to your budget when needed will ensure you stay on track when your income changes.
6. you forget annual expenses
Annual expenses such as car insurance and MOTs, vet bills, school uniform and other bills that you pay in full are often difficult to record into your monthly budget.
A good way around this is to divide our annual payments into monthly chunks and put this money aside to cover the large yearly costs. That way, you'll be more prepared to cover large costs with the buffer you created.
7. you feel guilty when spending
Not having your finances in order can take a toll on your mental health and feeling guilty after spending is a sign you need to set reasonable boundaries to cap your expenditure. Being realistic and setting some money aside for luxuries will make it easier to stick to your budget.
8. your credit score has decreased
Overspending and missed payments can negatively impact your credit score. Get a hold of this by creating a detailed budget plan to prioritise getting your credit score to a healthy position. If you're worried about your financial situation and need debt advice, don't hesitate to contact our team to help you through difficult times.
9. you don't have a buffer
Putting a good amount of money aside is a sensible idea to cover emergencies and unexpected costs. This will give you more security and peace of mind in case something unexpected comes along, such as a car repair, large vet bill or childcare costs.
Not having this can make you feel worried or stressed about money so try to factor in a buffer into your budget.
Take a look at our useful resources and tools to help you kickstart a budgeting plan for a healthier financial future. Our budgeting template, benefits calculator and grants search tool are a great place to start.
your questions answered
I’m in debt
If debts are getting you down, we can advise you. Get in touch with a professional debt adviser, who can provide impartial and confidential advice and work with you to create an action plan aimed at improving your financial situation and alleviating your debts.
Are your services means-tested?
If you need financial support, we carry out a means test where we consider income, expenditure, capital and assets.
*Please note none of our other services are means-tested.
How confidential is caba?
Everything you tell us is kept in the strictest of confidence. We don't share your personal information with any third parties, and that includes the ICAEW. Caba is a separate organisation from the ICAEW and is an independent charity with its own board of trustees.
Do I have to donate to caba to access its support?
Our services are free and you don’t have to donate to be eligible for our support. Donations are entirely voluntary.
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