If you follow me on Instagram, then you would know that every Sunday, I host my weekly ‘Sunday Money Confessions’ series. This is where people anonymously share with me their bad money habits, recent splurges or most expensive purchases. Since being in lockdown, this weekly series is pretty much the highlight of my week as I always love hearing from you all. However, despite hosting this series for a few months now, I am always left stunned after hearing some of these confessions! After the latest round of money confessions, I felt somewhat inspired to write this blog post. As a result, this week I am here to discuss how NOT to splurge your money!
Creating a Budget
When it comes to NOT splurging your money, what we need to do is to create a budget. A budget is a spending plan designed to help you stay on top of your finances and to stay out of debt. There are many reasons to budget; however, due to the current economic climate, budgeting is a crucial skill we all need to adopt! It helps us prioritise how and where we should spend our money. If you’re someone that could definitely do with learning how to budget, then here are few simple budgeting steps I recommend taking:
1) Figure out your monthly income, if this consists of your salary then your salary after tax is needed for a true representation of how much money you have left available for the rest of the month.
2) Write out a list of all your monthly outgoings. (This will include all of your direct debits such as rent, bills, debts etc.)
3) Next is to consider what else you spend your money on. Do you like to purchase a Starbucks coffee every day on your trip to work or do you go out to the pub weekly and spend a small fortune? All these things must be considered!
4) If you have money left over then you can allocate the rest of these funds accordingly. Do you want to save or invest the rest? If you are looking to invest, then the Investing Guide is a great resource to help you start your journey!
5) However, if you find yourself in negative figures then you may need to review your financial budget. Is there anything you can cut out? You’d be surprised with how much we spend on things we don’t necessarily need. Now, I’m not saying that you can’t treat yourself, however there are things we can definitely cut lose! Struggling to work out what you can cut out or reduce? Then the Workbook is the perfect guide to help you review your finances effectively!
After you have deducted your expenses from your income to help manage your money better, you can split any money you have left over into a daily or weekly budget, so you have a better way of tracking your finances. I personally work out a weekly budget so I am aware of how much money I can spend on a weekly basis. However, if you are someone that would prefer to use a budget planner instead, then this can be a great tool to help you out with your budgeting and help you become more disciplined with your money!
Hopefully these simple tips to drawing out a budget will help you become more disciplined with your money, reducing your chances of splurging your money all in one go!
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