How To Improve Your Budget

Having a budget is the one of the best ways to ensure you know you’re finances. Budgets don’t have to be restrictive, nor should they be. What a budget should do is help your money work the best for you! When mentioning budgets to people, I think that the overwhelming response is that a budget is boring. That setting a budget for yourself is setting yourself up to fail. But, it honestly doesn’t have to be like that!

 

So, put simply, you need a budget.

 

This post goes into much more detail about how to make a budget. You need to work out your overall income, your fixed and variable expenses and then any savings or investments you might do. Take away everything away from your income and it should be positive. If it isn’t, then you need to sort our budget first.

 

But what happens if you already have a budget? Then, you need to improve it!

 

Your budget should be ever evolving. Things change, circumstances change and budgets are no different. What might be a set-in-stone thing at one point might not need to be on the list in another part of life. For example, we have childcare costs at the moment but we won’t need them forever! So, the budget will change as times change. That’s a good thing; you need to re-evaluate your budget often. For an in-depth look at our budget, then check out my budget with me videos over on YouTube where I show all of our budget in detail 🙂

 

If you don’t already, then you need to track your budget. You need to track your income, fixed expenses and your spending. it is so important that you do this. Tracking your budget – through whichever method works for you – shows spending patterns, trigger points and holes in your budget. Without knowing what they are, you can’t fix them! By tracking your budget – which shouldn’t take long at all – means you can then work on improving it. Improving it and tweaking as you go along will give you so many options. It will be worth it, I promise.

 

So, how can you improve your budget?

 

The first thing you need to do is check it regularly. There is no point in writing a budget, setting it all up and then never looking at it again. A budget should be a working document – whether that’s on paper or in a spreadsheet – which needs to be checked regularly. I update my budget planner daily; whether I’ve spent money or not. I track my No Spend Days in there, plus spending when it happens. I also track any extra income I might make plus tick off savings as and when they’re completed. This takes me less than 10 minutes every day. That’s it! Just a quick update on an evening when the kids are in bed and that’s it. Checking in regularly with your own budget is a must if you want to improve it.

 

Secondly, you need to adjust it when needed. I have mentioned already that a budget is a working, evolving document. If you find yourself constantly going over your grocery budget because you are spending too much on food then you can do one of two things. You can either work on reducing your food spend, or you can increase the numbers in your budget. A budget has to be realistic, to suit your family needs. An example of this in our budget was our miscellaneous category. Before Christmas I increased our misc. budget to £150 a month rather than the £100 it had previously. This is to account for the extra spending we were doing in the run up to Christmas. After Christmas it has then gone back down to the original £100 a month, which we have stuck to so far. Your budget needs to be flexible.

 

Lastly, you need to know it inside out. A budget needs to be something you can think of and use on your every day life. Now, I don’t mean that you should have a running total of how much you’ve spent in your eating out budget, but you need to have a general idea. My budget planner has a weekly check in page so that you can do a weekly update in terms of numbers, to check that you’re staying on track and adjust accordingly. You should know when your direct debits come out for things like mortgage/rent, council tax, gas + electricity and water. It’s important that you are organised with these things so that you don’t get behind in anything. Knowing your budget inside out will give you knowledge, and ultimately more control over your spending 🙂

 

So, these are just three different ways you can improve your budget. Having a good budget which works for your household can help you achieve your financial goals. Whether that’s saving for a family holiday, a new-to-you car or bigger things like early retirement, having a budget in place will be the first step towards this. It isn’t boring, honest!

 

Do you have any more tips? Share them below! 

 

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