Budget Management Tips When You’re Not Sure Where To Start
For most people, the hardest part of working out a budget is figuring out where to start. It took me quite a few years of just spending and running out of money to realise I needed a budget. The most important thing is to have some simple budget management tips in place to help you through. These tips will be there to guide you and help you along your money management journey.
Budget management tips 1: Know your monthly income and your fixed outgoings
The most important thing is working out the money that comes in and the money which comes out regularly each month. If you’re self-employed or don’t always earn the same each month I have a whole post about budgeting for you. Once you know your income figure and your fixed outgoings you’ll know what you’re left with.
I always recommend that you have a separate account for your fixed outgoings to be paid from. So you don’t always have to think ahead. My recommendation would be to have all your outgoings come from the account you are paid into. And then have a Monzo account for the rest of your spending.
Tip 2: Work out your money priorities
To best be able to manage your money you need to work out your money priorities. Are you saving for anything in particular? Are you saving for multiple things? Perhaps you have a long-term goal of a house deposit and a short-term goal of a holiday. Or maybe your money priority is just to have some rainy day money and enjoy the rest. Whatever works best for you. If you are unsure of where to begin with your financial planning, consulting with professional money management advisors can be beneficial. They can help you to clearly define your goals and create a plan for you to best achieve them.
Budget management tips 3: Track where you spend your money
This can be the toughest of the budget management tips as it involves looking at everything you spend. This is the part where I find Monzo can really help. Through the app, you can see section by section where you’re spending. Is it on travel, eating out or shopping? By looking and tracking what you spend you’ll learn a lot about your spending habits.
I always found I was really frivolous around payday which is probably true of most of us. But if I’d only put myself a set amount in my account to spend maybe I’d have been more calculated with my spending.
Tip 4: Expect emergencies and save for them
We don’t like to think about it but expect and plan for emergencies. It’s so important to have an emergency fund as you never know what may happen. COVID-19 is something no one could have predicted, but it happened and it financially impacted a lot of people. An emergency fund can help keep you afloat in situations like that. Or it may be something a bit more boring like your car broke down, or you need a new washing machine.
We try to save a little bit of money every single week into our emergency fund to know we have a cushion to fall back on should we need it.
Budget management tips 5: Save money often and as much as you can
Once you know your money priorities you’ll know anything you’re saving towards. Break down the cost of your savings to a monthly (or weekly) figure to see how much you need to save to reach your goal. This will help you stay on track for your goal and know how much to save. I always think automated savings are the best. Have them come out as a standing order the day after you get paid. You’ll learn to forget about them and not rely on the money.
You can use tools like Plum where they’ll take little bits of money from you into a savings account if the app deems you can afford it. Or you can save a little each week through investing in Moneybox. Or just simple transaction roundups through Monzo.
Tip 6: Have a plan (even if it’s rough)
Even if budgeting isn’t really for you it’s worth having a rough plan. Just by having your fixed costs and savings automated you’re left with an amount of money to last the month. It may not seem like it but that’s a very rough budget.
I’d always say separate it out into the categories you spend on so travel, food, entertainment, shopping etc. This way you have a bit of a limit when it comes to each section so you can plan better. For example, if you know you’re running a bit low on food money you may think twice about that takeaway. Find a plan that works for you and there’s more chance of you sticking to it.
What are your budget management tips?
20 responses to “Budget Management Tips When You’re Not Sure Where To Start”
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Rhian Westbury
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Brilliant advice here Rhian, I feel like Lock down has given me a chance to reset my spending habits.
I have saved so much more than I ever thought I would be able to and I seem to be going quite well bringing these new habits in to the new normal.
I had never really considered how important a budget is until recently.
Thanks for sharing x
Lockdown seems to have been make or break for a lot of people when it comes to budgets x
These are really useful tips. Money management can be a tricky topic, especially on a tight budget. Great advice
These are some great tips – I think sometimes it can be so hard knowing were to start with a budget, and how to keep it working as time goes on as well.
Yes we keep a budget for bills and stick to it. My husband and I were homeless when we first got married so we know how important it is to pay bills
I’m sorry to hear about that, I’m glad that you’ve found keeping a budget has helped since then x
Excellent advice. For my family, what works best it the habit “Save Before You Spend.” Our cashflow is divided into 3 and prioritzed as follows – 1. Pay Bills. 2. Save 3. Make use of whatever is left to last until the next paycheck arrives. So far, so good. Oh, and we also got rid of credit cards. We only spend what we have.
I love your motto of ‘save before you spend’. It’s so true as you learn to spend within your means and you don’t miss what you didn’t have if you save as soon as you’re paid x
These are such good tips. I need to get much better at budgeting, I do try but then I get impulsive, particularly around travel, which isn’t helpful to a working budget. It is on my list to try to get much much better at though and lockdown has certainly helped provide more of a focus.
I know the feeling, I’ve always been pretty frivolous when it’s come to holidays and travel, but you can’t put a price on experiences and memories (within reason) x
Some excellent tips, we bidget all the time and use a spreadsheet to record how we getting on and what we doing, the only thing we are not good is planning for an emergency, monies tight and we find it difficult.
Personally I am good at making budgets but not too great of managing it so these are great budget management tips which I would definitely need to follow.
Some great tips here for sure…especially the one about saving for emergencies because they can creep up on you when you least expect x
I really need to get better at budgeting so I will bookmark this post for future reference, thank you for the tips!
Some really brilliant ideas you have here . Lockdown has definitely made me look at our spending habits and I’ve managed to save a little bit away for Xmas which is fantastic
I certainly think it’s made people look more deeply into their savings and expenditure, hopefully people will benefit from this x
Great advice! It’s so important to budget-I registered with Monzo ages ago so you’ve reminded me to do it
These are great tips Rhian, we have had to really look at our budget throughout lock-down as being self-employed we have taken a huge financial hit. I am so glad that we did have a savings pot to fall back on.
I’m sorry to hear that, my fiance is self-employed so we’ve had to do a similar thing and having a back up pot of money was our saving grace x
Your advice here is perfect for someone like me! I tend to track my incoming and outgoing expenses (and this year I’ve spent as little as possible), but I really should start saving properly.