|1.||Bills||2.||How to pay your bills||3.||How to set up a bank account|
|4.||How to set up a savings account||5.||Borrowing money||6.||Credit score|
|7.||How to budget and save||8.||Education financial support||9.||What to do if you're in trouble|
7. How do I Budget and Save Money?
What is budgeting?
Essentially, budgeting is having a look at the money you are getting each week/month, and making sure that you are getting more money coming in than you are spending. To do this, it helps if you keep a track of all of the money that comes in, and all of the money that goes out; more on this can be found below.
What are the benefits of budgeting?
There are a number of benefits to taking the time to budget properly. These can include:
- Having money saved for emergencies and unexpected costs, such as car problems or house repairs;
- You will have money saved that can be put towards a new car, a holiday, days/nights out with friends, etc.;
- If you are able to pay your monthly outgoings (store cards, pay monthly phone contracts, bank loans, etc.) on time, you will improve your credit rating
What could happen if I don't budget?
If you don't budget properly you could potentially run out of money. As a result of this:
- You could end up in debt, which will make it harder to get loans and mortgages in future;
- If you fail to keep up mortgage payments, your house could be repossessed;
- If you fail to keep up rent payments, you could be evicted from your house;
- Your electricity/gas/water could be cut off if you don't pay your bills;
See our What to do if you're in trouble section for more information.
How to budget
It might take a while, but the best way to keep track of your budget is to create a spreadsheet, and write down all of the money that comes in and all of the money that goes out. This way, you can easily see where you are spending too much, and then make savings where you can. It also helps to write down when your money comes in, and when money goes out each month on bills, phone contracts, etc., so that you are never caught short without enough money to pay.
A few ways to save money include:
- Look at your lifestyle, and decide whether you can afford to do the things you enjoy doing. This can include drinking, smoking, certain food, fancy coffees, parking, going on holiday, Netlfix/Spotify accounts, etc. You don't necessarily have to stop doing these things, but it might be worth seeing if any of them can be done more cheaply;
- Set up a savings account and put some money into the account whenever it comes in. It doesn't have to be a lot – it all helps – so don't worry if it's only a few pounds a week/month;
- Having something to save up for can make you more motivated to save. Something like a holiday, a car, a deposit on a house, or a holiday can give you something to work towards and make it seem more worthwhile;
- Prioritise what you spend your money on. Then, once the essential things have been paid for (and some put aside as savings!), you can spend money on things you enjoy. It is recommended that you prioritise things like: