You’re probably wondering, was the world always this expensive?! How much did I spend just on drinks last week?! Holiday, you must be joking?! We all need to allow ourselves time to enjoy but blowing the budget isn’t the answer. So if you want to establish the financial freedom you deserve, the first step is setting up a budget. So with that mind, here are some budgeting tips to get you back on track.
1. Separate mid-week spending from weekends
Setting up a budget means setting an amount of money you can spend each week, sure. But we like to be realistic over here. Because starting a budget at the beginning of the week is all well and good, until you get to 48 hours free time at the weekend, have loads of fun plans in the diary and realise that you’ve got $4.71 to cover everything. That’s why it’s a wise idea to set a budget for mid-week fun and weekend fun. Because the truth is, you deserve to have fun! That’s why we live by our 50/30/20 rule, which allocates 30% of your income to fun each week.
2. Search out the unnecessaries
We all have dozens of transactions coming out of our bank account every month, but a successful budget is one which weeds out the unnecessaries. In the world of subscriptions we live in, it’s a little bit too easy for spending to run riot. Start off by looking through your bank balance to see if there are any unnecessary monthly costs going out, such as a magazine subscription you no longer use. Maybe it’s just one extra luxury you don’t need. Cut them out, have yourself the cash and if you can, direct the savings towards your investments.
3. Make a wish list for your next purchases
Ever feel like you buy things without really wanting or needing them but simply because they’re the latest thing you saw whilst scrolling on Instagram or because it was in the sale? Next time you feel like you want something, add it to a wish list. The simple act of writing it down will already require it to have some level of validation and want rather than being a whim. If it’s still on your wish list a month later, you’re clearly wanting this and can consider making the purchase, without the impulse spending.
For optimum budgeting results, these top tips should be combined with an overarching budgeting technique. Want our budgeting tips? Sign up for a membership now, and get our favourite budget method.
4. Get down with the 50/30/20 rule
The 50/30/20 divides your budget by percentage into needs, wants and savings/investing respectively. That means 50% of your income should be allocated to necessities, like rent, bills and food. 30% should be treats, eating out, holidays, hobbies, whatever floats your boat. Finally, 20% goes entirely to saving and investing for the future (Future You will thank you).
5. Zero based budgeting
Zero based budgeting is for those who need a much more disciplined plan and want to allocate all income into labelled outgoings. In a nutshell, you tick off the costs of rent, mobile phone bills, food costs, weekly entertainment, investments until you reach zero. As a result, you should maximise your savings and avoid splurging any surplus.
We all need to have a moment to be spontaneous and sticking to a budget can be difficult, especially if you have saving goals that seem so far away you can’t even imagine reaching them. Just remember, the best day to start investing was yesterday. The next best day is today. Take control of your budget and maximise your financial situation.