We all know it’s a good idea to ‘cut your cloth' according to your means. But to actually sit down, write a budget and stick to it takes a certain discipline and focus. Having the right tools can help, which can be as simple as trying our personal budget calculator and creating a monthly budget spreadsheet. This is how budgeting could benefit you:
You could save more than you think – Once you add up small impulse purchases like extra items of clothing and takeaways, you’ll be amazed at how much you could save. No one’s saying you should cut the guilty pleasures entirely but sticking to a budget gives you a better chance of maintaining financial security.
You can manage in an emergency – You never know when you might need cash for a rainy day, so deciding how to budget your money means you can finance any last-minute expenses, from medical emergencies to funeral costs.
You can save for a goal – Got something in mind you want to save up for? Whether it’s the trip of a lifetime or your child’s university fees, doing your sums in a spreadsheet gives you a target you can save towards.
Our budget calculator explained
Our personal budget calculator is essentially an expenses and outgoings calculator. By adding details of your monthly or weekly finances, you can figure out what proportion of your income is spent on different things. That includes monthly essentials, such as water, gas and electricity, as well as spending tied to your circumstances, such as pet food and veterinary bills, and finally, your hobbies and interests. You’ll get to see a visual summary of your expense calculator results, giving you the chance to learn how to budget more effectively.
How to manage overspending
Figuring out how to manage money isn’t always straightforward. Life can be unpredictable, and unfortunate events like job losses or health problems can put a strain on anyone’s finances. But if you’ve tried our monthly budget calculator and your outgoings seem too high, here are some tips:
Focus on your priorities – Food, clothing and housing costs should come top of your list when it comes to managing your money.
Look for discounts – Try adding the phrase “discount code” to any online searches you make – there are many reputable forums and voucher websites around today that could help you save on big and small purchases.
Shop online – Online grocery shopping means you can stick to a budget and avoid the tempting treats at the checkout aisle.
Pay off any debts – Your monthly budget can get squeezed if you’ve got debts hanging over you. Taking out a car loan, for example, can cover a short-term need, but you’ll still need to repay the money.
Get support if you need – If you find yourself in financial difficulty, support may be available through the government’s Universal Credit payments, or from local councils and charities.