Budgeting
A clearer picture of your day-to-day finances
Understanding the importance of budgeting is crucial for successful
financial planning. It's the only way to gain, and stay, in control of
your money. It will enable you to plan your finances and reach your money
goals, whether they're as basic as having money left at the end of the
month, or as ambitious as owning a second home abroad.
Preparing your personal budget will allow you to see how much money you
have coming in and where it goes.
Budgeting will highlight if you're spending more than you earn - so you
take control of debts and break any bad money habits. And if you're looking
to start a regular saving or investment pot for a specific money goal,
budgeting will show you how much you can afford to put away.
Golden rules of budgeting:
Be honest you'll be surprised how much everything adds
up if you really think about how much you spend. Try writing everything down
for a week - coffee on the way to work, drinks with friends, magazines…
you'll soon start to see where your money goes.
Be realistic - you can only plan based on the money you
know you have coming in and once your spending is under control. So don't be
over ambitious with your plans. Be realistic and you're much more likely to
succeed.
Be prepared to change- if you get to the end of every month
and find you're living off credit cards, exceeding your overdraft limit, or
struggling to pay bills, something needs to change. The good news is there are
lots of small changes you can make that will add up to a much healthier budget.