Budgeting – Some Handy Hints
Managing your personal finances is never easy, especially if you’re in debt and have large, unavoidable monthly outgoings. One of the best first steps that can be taken in the process of recovering your financial position is to develop and implement a budgeting plan.
You’ll have to make some sacrifices, but carefully planned and operated budgeting will still allow you to live comfortably, whilst staying well within your means and allowing you to handle outgoing expenses more efficiently.
Here, we discuss how to go about devising a budget, and then offer some helpful hints and tips to help you on your way to budgeting success.
First, you’ll have to work out all of your monthly outgoings, excluding your grocery shopping costs (but including average costs for transport, entertainment, tobacco and alcohol if you consume then, and so on). Write them down on a sheet of paper and then carefully scrutinise them.
Which ones are unavoidable expenses (gas, electric, water bills, credit card and loan repayments, and so forth)? Write these down on another sheet of paper. Of each of the ones remaining, ask yourself the question: Do I really need this? If the answer is no, don’t include it in your budget (the base of which is now formed by your second list).
Cut Back On The Luxuries
The things you’ll have to dispense with will no doubt be luxuries that you may find hard to give up – cigarettes or cable television perhaps, but really try to be honest with yourself and stick to the task at hand: reducing your outgoings.
Be Frugal With Food
Next, work out your average monthly spending on food, and think of ways you could bring this figure down. Could you shop at a cheaper supermarket, for instance? Or could perhaps cut out expensive, branded foods and go for no-frills alternative?
Devise weekly meal plans and buy only the food needed to implement them. You’ll be surprised at how much you can cut your spending on food – it may even possible for you to halve it.
Add your new, reduced, grocery spending target to your budget, and there you have your individually-tailored live-within-your-means plan. Take a look out what spare cash you have left over. If there is enough, allocate a small portion of it for a monthly treat, and then either stash the rest in savings, or use it to pay off your debts.
When Budgeting Won’t Get The Results
By now, you should have a fairly comprehensive budget in place. If you’ve trimmed back your spending as far as you can and you’re still short on cash, consider extending your overdraft or swapping credit card debt to a better rate of interest.
With all these options exhausted, you could consider taking out a short term loan whilst you get your finances out of the red, and back into the black. Reputable lenders such as www.piggy-bank.co.uk offer a range of short term loans for situations where budgeting just won’t get you the results at the speed you need.
Setting a budget and reducing your outgoings will never yield immediate results, but with careful planning and a large helping of patience, you’ll be back to living within your means in no time.
Wendy Lin is not only a professional freelance writer, but she is also a mother, artist and businesswoman. She spends much of her time meditating and travelling.