Financial Planning: Best Practices to Budget Your Expenses


budget your expensesIf you follow the A Tidy Mind blog, you may be aware that our organisers offer a financial organising and budgeting service. This evolved because we found out clients sometimes struggled with organising their finances. As well as making and implementing a budget. If you find it challenging to budget your expenses, taking a an organised approach can save a lot of money and give you back control.

Do you often find yourself worried about money and/or skint at the end of each month? These are two hugely common problems that many adults have. And these often occur because they are not budgeting. You can carefully control your spending with a budget. Furthermore, should help you to improve your money management and improve your financial situation.

The Benefits of Budgeting

Budgeting might not seem the most glamorous thing in the world. But you might be amazed at the positive impact it can have on your life. By budgeting each month, you can gain control of your finances, save money each month and cut back on frivolous spending. Many people find that budgeting can greatly reduce their financial stress. This is because they know exactly where their money is going each month and feel a lot more in control in their life. Interested? Read on for a few of the best budgeting tips to help you to get started.

Work Out Your Total Household Income

First, you need to know what you are working with each month. Calculate your total household take-home income each month. This way, you know exactly how much money you have available to you every month of the year.

Calculate Your Expenses

Once you have your household income figure, you should then create a list of all of your regular expenses. This will immediately help you to establish whether or not you are living within your means and if you need to make big changes. When you have a list of expenses, you can then go through each one to see if there are savings that could be made. Or if you could cut out the expense entirely. Often, you can make savings on things like car insurance by shopping around online to find a better premium.

Try the 50/30/20 Rule

A great budget for people just getting started with budgeting is the 50/30/20 rule. This involves 50 of your household income going towards essentials (mortgage/rent, food, bills etc.). Then 30% going towards non-essentials (takeouts, nights out, clothes etc). And the remaining 20% going towards clearing debt and savings. The percentages can be adjusted to your needs. But it is an easy way to start controlling your spending and ensuring that some is being put to good use each month.

Budgeting may not be very fascinating topic. However, it is a smart way to get in control of your finances, reduce stress and build towards a better financial future. People often end up in money trouble and/or worried about money when they do not have a system in place. So, you should take control today by creating and sticking to a monthly budget.

If you liked this article, you may be interested to read this post by Caroline from A Tidy Mind West & South Yorkshire: How Decluttering Can Save You Money.

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