Making a Budget

A good budget is a useful tool. It's your own personal way of staying in control of your cash. If all your money seems to vanish in the space of a couple of days/weeks, leaving you with nothing to show for it, you need to take a look at where it all goes.

Keep track of your spending

  • Try keeping a note of everything you spend from one pay day to the next. You may find that you are spending more than you can afford on takeaways, music, alcohol, phone calls, or clothes.
  • Look at your outgoings can you cut down on some of your expenses?
  • Make a list of all the things you need to pay for. Include your rent, transport, groceries, bills, loan repayments and direct debits, and anything else you can think of.
  • Remember to include a realistic amount for going out with your mates and/or treating yourself. Don't force yourself to live like a hermit unless you're in serious debt.

!TIP! add 10% to your total expected outgoings. This can cover extras such as birthdays, car repairs or fines. This should help with the shock of any surprises.

If the amount you need to spend is much more than you have coming in, then sooner or later you will need a debt action plan. It'll involve making some serious cutbacks, while looking at ways to increase your income. On the other hand, if you're lucky enough to have money left over, you can look at all kinds of saving and investment options, provided you actually stick to your budget.