What I’ve Learnt From Having A Budget

Ever since the first time I moved away from home when I was 21 I’ve had a budget of some sorts. Back then it was just a ‘make sure I have enough to pay the bills and eat’ mindset. And it’s progressed and wharfed from there. What I do is by no means perfect, I still spend too much on clothes and food. But hey they’re my pleasures in life. When I thought about what I’d learnt from having a budget over the years it really made me think.

Sometimes people think of budgets as being restrictive. Or that they’re there to make sure you save but don’t have fun. In my mind, my budgeting is pretty basic. I’m no financial expert, but here’s what I’ve learnt from having a budget.

It takes time to perfect and maintain

In the same way that there’s no ‘one-size fits all’ approach to budgeting, it does take time to get right and maintain. You won’t create a budget today and be nailing it from tomorrow. And if you are then you need to share your self-discipline. This is especially true if you never really had a budget before. Or you just spend and hope you can still eat at the end of the month.

When I first put together my budget it took me a while to get into the practice of it. I found it tedious noting down all of my expenses and tracking it against what I’d budgeted for. But taking the time to get it right is so worth it in the long-run. And even now I’m learning but seeing my savings goals get ticked off spurs me on.

I’ve learnt from having a budget that we all make mistakes

No one is perfect and we all make mistakes. I’ve made plenty of mistakes with money over the years, and I’ve learnt from having a budget that I’m likely to carry on making them. The most important thing to remember when you make a mistake is that you can move on from it.

Perhaps you went totally over budget on something, or you had a massively impulsive online-shopping spree. Whatever mistake you made can be worked out. But the most important thing is to work out why you slipped up. Did you not budget enough for an area you love spending in? Or did you buy because you were feeling a particular way?

You should adapt your budget when your goals or finances change

If your savings goals change or you get a new job your budget should always change to match it. If you want to start saving for something extra like a holiday or a new car you’ll need to edit your budget to allow you to save more. Or if you decide you want to start putting money aside for your future in an ISA or bond. Work out what’s important to you and where you want to save before you craft your budget.

If your finances change then so should your budget. Perhaps you’ve got a pay rise so you can save a bit more, plus have a little leftover for a monthly treat. Or maybe you’ve taken a cut in your hours so you need to reduce your budget and spending. As your budget is going to change slightly month-on-month this should be pretty easy to do.

When we got the keys to our house and our monthly outgoings changed majorly I overhauled our budget. When I got my first full month’s wages from my new job I changed things again to ensure I was maximizing what I was getting.

I’ve learnt from having a budget to be realistic

This is such an important thing I’ve learnt from having a budget. Be realistic about what you know about yourself and what you love spending on. You may decide to cut your weekly coffee shop trip. But if this is something you look forward to every single week you may end up slipping up in a bigger way because you’re sad you’ve missed out. If you love buying new clothes there’s no point putting your budget at zero. It’s almost certain you won’t stick to it.

In this case, make reductions, but make it realistic. If you used to spend £200 a month on clothes try dropping it to £100 and see how you go. You might find in six months you can reduce it to £50 a month and then £100 every four-months when seasons change.

For me, I find having a weekly amount of money that’s mine works best. Then I can work out how to spend it and know if I spend it all I only have to wait a week. This may not work for everyone and you may have a set amount for clothes, eating out, entertainment etc.

Every month is different

Following on from above about seasons, I’ve learnt from having a budget that no two months are the same. Your basic savings and things like transport might not change. But every month you’ll do different things. One month you may have quite a few meals out so you need to budget more in this area. Another month you may have your MOT due so this needs to be budgeted for.

I’ve learnt to track and amend my budgets as I go

Because every month is different you should track and amend your budgets. Before each month starts/ you get paid, look at your budget and adjust it. Take out anything which isn’t a regular spend and work out what you need/ want from that month. This way you’re more likely to stick to it and less likely to go over in a particular area just because it’s a busy month.

Every month I’ll look ahead to anything big coming up over the next 2-3 months and work out whether I need to adjust anything to put anything aside for it.

Separate out your spending money and your bills/ saving money

I just tacked this onto the end as it was something I learnt from having a budget pretty early on. Have a totally separate bank account where all your bills come out so it’s not where your spending money lives. And have separate accounts for your savings (or pots if you’re on Monzo). Knowing what’s in your account is yours to spend will help you visualize and stick to your budgets better.

Do you have a budget? What have you learnt from having a budget?

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