How to Budget your Finances like a Champ

Written by Posted On Friday, 16 October 2015 06:42

When it comes to managing your money there are few things better than having a budget and being able to stick to it. Some people are naturally good with money, others are known to be weekend millionaires – by learning how to control your spending you will find yourself far less stressed, far less worried about your finances, and you’ll even feel much more in control of your life. While you won’t suddenly solve all of your financial problems overnight with this article, you will learn how to budget your finances like a champ, and in as little as five easy steps.

Step One: Write down everything you buy

It’s a known fact that young people these days are much better at budgeting than their parents. By figuring out where you’re wasting money on pointless purchases you will be able to figure out what you can cut down on. The easiest way of doing this is by writing down everything you buy, as soon as you buy it. This doesn’t have to be pen and paper if that’s a little too archaic for you – this could equally be an App or the notepad on your phone. Just write everything down – every time you do, you’ll see what you bought before, and remember to slow down on the spending. Once you’ve done this for a week you can move onto Step Two.

Step Two: Build a budget and set yourself goals

Once you know how much you spend in a week, you can work out roughly what you spend in a month. Plug these into a spreadsheet (there are plenty of online tutorials to help you do this), and see how much you’re realistically looking at saving every month. If any of these numbers are scaring you, say if you’ve just realised that you’re spending around £300 a month on tobacco or coffee from your favourite coffee chain, you can start working towards cutting these numbers down.

Your goals are specifically for repayments. If you’re committed to paying off a credit card or short term loan which is burning a hole in your wallet, commit yourself to paying as much as you realistically can every month without affecting your other obligations. Every time you hit this goal you will get a little boost to you mood, and you can consider raising the bar you’ve set. This is one of those times where ‘the more the merrier’ really applies – just make sure you don’t overstretch if you want to avoid unnecessary stress.

Step Three: Save what you can, little by little

Say you want to go away somewhere special this year or perhaps you want to buy yourself a new car, you’re going to need a little capital. Unfortunately saving money doesn’t just happen overnight. Start saving a little at a time, cutting wherever you can. This can be as simple as cutting down on cigarettes, taking lunch to work or even just buying fewer frivolities. With just a little effort you will start feeling slightly richer at the end of the month.

Step Four: Sell your talents

Do you have any hidden talents that you think people may find useful? Are you secretly an expert guitarist or a whizz on Photoshop? Consider putting together an online course for a site like Udemy. You can earn a passive income after a short time investment, helping you meet your financial goals sooner. There are other ways to monetise your skills, too – if you’re fluent in a second language you can become a tutor in your spare time, or if you’re particularly handy at arts and crafts, you can start selling your products on a site like eBay. When you’re working with something you enjoy it never feels like work.

Step Five: Keep checking back to your budget

Your budget is the one thing you should have in mind throughout this entire process, but thinking about it simply won’t be enough. You need to refer back to your budget on a regular basis if you’re going to stick to it over the course of the month. An easy way of doing this is by keeping it on your phone, though if you’re not too tech savvy you could consider printing out an abridged version and keeping it in your wallet, where it will dissuade you from that extra lunchtime indulgence or that fifth cup of designer coffee this week. Look after your budget and your budget after you.

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