How to stick to a budget

A budget is a plan that sets out how you will use your money. Sticking to a budget can be hard, and a budget is no good if you just make it and forget it. Here are a few useful tips to help you set a budget and stick to it.

Why budget?

Budgeting allows you to control your spending once you’ve worked out your take-home pay. It helps you spend within your means so you don’t get into debt, and it can also help you to save up money for something big (like a new phone, car, house, island, etc.).

How to make a budget

Building a budget is more straightforward than you might think. You can use a budget planner, spreadsheet, or even an app! Here’s how to get started.

1. Where does your money come from? Think about how much money you receive every month, including any pocket money, earnings, or financial support from the government. The total amount is your monthly income.
2. Where does your money go? List all the things you spend your money on, how much, and how often (daily, weekly, or monthly). For example, you might buy snacks daily, go out with friends weekly, and pay your phone bill monthly. These are your expenses. If you have a bank account, it can help to look through the things you’ve spent your money on over the past few months.

What is a ‘need’ and what is a ‘want’? 

Review your expenses and income side by side. Whether you have more income than expenses, or more expenses than income, categorise your expenses into ‘needs’ and ‘wants’. This will help you identify the things you must keep money aside for, and the things you can probably cut back on. 

How to stick to a budget

Here are six tips for staying on track:

• Be realistic. Think about how much you spend now and your lifestyle. If you don’t leave any money in your budget for shopping but you’re a trainer addict, you’ll be sure to break it. It’s better to have a realistic budget that you stick to, rather than an ambitious one that doesn’t allow you to use your money how you want to.
   
• Set milestones. A large savings goal can sometimes seem impossible, but breaking it down into smaller chunks can help. Instead of focusing on your final goal of £2,000, aim for £20 a month (or £5 a week). Allow yourself a little treat whenever you hit a savings milestone, but don’t go overboard!
   
• Use an app. Some apps can help you to set a budget, track your spending, and see what you’re spending your money on - all of which will help you to spend within your means.
   
• Spend wisely. Before you buy something, always ask yourself whether you truly need it. If you do, shop around to make sure you’re getting the best price, and   Check out our link to a printable card below that might help you.
   
• Update your budget as you need. Your financial circumstances might change, for better or worse. Keep an eye on how it's going, and adjust your budget to meet your needs and goals.
   
• Account for special and unexpected occasions. Birthdays, holidays, nights out, and other special circumstances should all be factored into your monthly budget. Otherwise, when these occasions crop up, you might find your budget can’t handle it.
   
• Consider cheaper alternatives when you’re running low. For example, a party at home might be cheaper than going out; homemade gifts can work out less expensive than something shop-bought; and learning how to cook your favourite take-out will enable you to eat it cheaply and more often.
   
• Avoid relying on credit. It can be tempting to turn to a credit card or delayed payment service like Klarna, but these won’t help you budget. What they’ll actually do is build up your debt so you have to pay more in one go later on, unless you pay everything off straight away. You’re better off putting money aside to spend and using what you have.
   

Budgeting can be tricky and you might feel like you’re missing out on things that are going on, but stick with it! Missing out occasionally is better than running out of money at the end of the month!

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