There are many people that find it really hard to manage their money. By the time they get paid, they are desperate for the money or they may even have had to borrow to keep them going. This can sometimes be due to their pay just being too low to cover all of their essential but normally it is due to not budgeting well. Budgeting is not easy, but there are things that you can do that will make it easier.
Take stock of your current situation
It is a good place to start to look at what your current financial situation is. This needs to be a thorough investigation where you will be able to see exactly how much money you have coming in and what you pay out. This needs to be looked at across the course of a year at least, as there are some things which we buy yearly, such as gifts, some insurances, car MOT and things like that. This means that we will be prepared for everything that comes along. It is also worth seeing what things money is being spent on and how necessary they are. Separating essentials from luxuries is useful as that can help you to prioritise your spending.
It can be worth making a note of how much you need for essentials each month. This will include your rent or mortgage, loan repayments, contracts, utilities, travel to work, basic food and clothing and things like that. That money will always need to found and their might be expensive essentials that come yearly, such as car tax and MOT that you will have to make allowances for.
You may also find that your income changes across the year as well. This might be due to having to work more hours or overtime at certain times of the year or less at others, perhaps if your work is seasonal or something like that. Make sure that you allow for this in your figures.
Allocate a budget
Allocating a budget is not that simple. Now that you have figures you should have an idea of how much money you have available each month after taking out essentials. It might be that you have some months when you will spend more than you earn and others where you have lots left over. It might be that each month is very similar or that they are very different. It can be worth still looking at it on a monthly basis as there tends to be some more expensive months, such as around Christmas, if you celebrate it or in winter when you pay out more for heating or in the summer if you pay out for a holiday.
It is wise to think about each month and how much money you are likely to have left and set a budget for each month based on that. It is wise to always give yourself less money than you think you will have available. Not only will this allow for any additional costs that you have not accounted for but it will also allow you to save a bit of money. In fact, if you do have months when you have more expenses than income you will have to save some money in those months when you are better off so that you have the money for those. You will need to work this all out.
Then you will be able to allocate your budget. You will need to decide whether you want a monthly or a weekly or a daily budget. This will be a personal thing depending on how you tend to spend money.
Work on sticking to the budget
The hardest part of the plan is sticking to it. It can be really tempting to want to go back to spending as you were before and it can be difficult to go without things that you really want to buy. This is why you need to continuously remind yourself of why you need to stick to this budget. You obviously had a reason for making it n the first place, probably because you were struggling to manage your money. It is not nice worrying about money all of the time and wondering whether you will have enough. With a well planned budget you will not have to do this. You will know how much money you have left after you have paid for all of your essentials that you can spend on yourself and this will enable you to spend carefully. It will mean that you will have to think hard about every purchase and whether you really need it, but this will save you buying things that you do not really want. It can often be easy to buy things and then afterwards wonder whether we really needed them and with a budget you should be able to avoid doing this as often.