| Financial Guidance

Budgeting: The devil’s in the detail!

Do you ever wonder where your money actually goes? Most of us have a pretty good handle on our big, fixed, expenses; most of us know approximately our mortgage repayments, utilities and council tax. But it’s the little expenses that can soon add up and leave us scratching our heads. When it comes to budgeting, the devil truly is in the detail!

Introducing or improving a way of budgeting your money can make all the difference and by keeping on top of your finances you can save more, spend less, and build up a financial safety net for any unexpected expenses. But, good money management isn’t just important for your finances, money worries can cause you stress, anxiety and countless sleepless nights!

The good news is that there are plenty of free online budget planners and mobile apps available that make the task so much easier. The Money Advice Service, for example, offers a number of different tools to help with this.

Whichever method you use, make sure you are honest and thorough. Be sure to include money coming in, including your salary or wage, benefits and tax credits. But, more importantly, be sure to include all money out. It’s easy for the little things to slip your mind when budgeting, but they can grow to become a significant part of your monthly expenditure. One takeaway coffee on the way to work each day can cost you an extra £50 a month! Add in the daily lunch time meal deal and you’re spending another £70.

So, make sure you catch your day-to-day expenditure accurately, food, clothing, entertainment, etc. Bank statements might help you be more accurate with this, especially if you pay for most things on your card.

Getting expenditure down on paper, on your computer or on a budgeting app, can help you rationalize those impulse spending habits more objectively and allow you to re-allocate your money to things that are most important to you.

When it comes to credit repayments, prioritization can also save you some cash. If you have multiple debts (particularly on credit cards) then these may take up a large chunk of your monthly income. But if you prioritise paying off the card or loan that charges the highest amount of interest, you’ll avoid building up interest - and more debt.

If you’ve found yourself being bombarded with multiple debts, a practical option could be debt consolidation. Basically, instead of trying to manage several payments from different places, you can take out one loan which could pay off all your debts at once, leaving you with one single payment per month. Instead of all those payments flying out, it’s just one regular payment, simple to manage and control. Further still, that one payment can be tailored to what you can comfortably afford. Depending on your circumstances, you may even find you are paying less interest per month. Plus it’s always good to feel in control and know you can manage your monthly budget comfortably.

If you need a period of penny pinching to get your finances back under control, when it comes to making cut backs and saving yourself some money, even small changes can make all the difference. Things like turning the heating down a little and switching electrical appliances off after you’ve used them helps save plenty of pounds that’ll soon add up at the end of the month. And don’t forget, with the bigger things like gas and electricity, it often doesn’t pay to be loyal to one supplier. Energy providers typically reserve their best deals for new customers, so shop around to find a cheaper deal elsewhere. You can use comparison sites like MoneySuperMarket and uSwitch to quickly and easily see the cheapest offers on the market - and if you find a better deal, switch!

When it comes to budgeting, the detail really matters. A thorough and accurate budget can take a little while but it can really pay off! If you take the time and do a proper job, you may surprise yourself on the savings you make as a result. Lots of little changes can make a big difference to your finances!

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