Make Sure You Do Regular Budget Reviews
Published / Last Updated on 16/01/2024
Things have moved on over the last 10-15 years regarding our spending habits and how we use money. ‘Back in the day’ you would go to the ATM and withdraw cash, or you would have a cheque book and write cheques for purchases alongside some card transactions.
Today, it is a world of:
- Cost of living increases with food, fuel, heating, mortgages, rents and most goods and services costing us much more than they did even just 2 years ago.
- Contactless payments where continous 'tap tap' payments are too easy.
- Wallets with debit, credit and store cards on our smartphones for more ‘tap tap’ contactless payments.
- Direct debits.
- Standing orders.
- We hardly ever use cash anymore (well we do, but few do).
- We also hardly ever use cheques.
It is so easy to lose track of our spending, how much we have, how we have spent and where we have spent our hard-earned money. It is time to make sure you have a budget. The government has at least one and sometimes two per year, so why do we all not have a budget every 6 months?
Bank Statements
- Get your bank statements out for the last 3 months.
- On a separate sheet or even a spreadsheet, make 3 columns for each month:
- 1.Essential Subsistence Expenses, 2. Leisure/Fun Money, 3. Savings/Pensions.
- Carefully note each entry in your bank statement and allocate it accordingly.
- Total each column and average each column, to find your average spend in each.
- You now know exactly where you spend your money.
Are there areas that can be cut back on? Have you revisited your gas, electricity, mobile telephone, gym or TV subscription packages?
Are you paying for things that you rarely use? Could they be cancelled or altered to suit your current use and lifestyle?
Separate Accounts
- Set up separate bank accounts for 1.Essential Subsistence Expenses, 2. Leisure/Fun Money, 3. Savings/Pensions.
- Transfer enough money each month or week into each account.
- You may also identify that you have more excess income over expenses and could be saving more into pensions, savings, and investments.
- Many mobile phone banking apps now have budgeting and goal setting tools, use them.
Live for today with one eye on tomorrow.
Remember the first rule of management: “Anything that is not monitored deteriorates”.
