If You’re Not Budgeting Already, Now’s the Time to Start

Now is the time to budget

We know a lot of people might think budgeting is tedious (and we can almost hear the eye rolling from here) but given the current events, it has become a priority for everyone. Now more than ever we really need to understand where our money is going. 

Here are some budgeting tips you might find helpful.

Add up the expenses that you need to survive

These are the absolutely essential, must have items that need to be paid above all else. And no, it doesn’t include your Netflix account. (Not saying that you HAVE to cancel Netflix, but it’s not an essential expense.

Concentrate purely on your fixed expenses – nothing else! This will help you determine exactly what you need to pay out each week/month, and determine if you have the income to cover those expenses. If not, you might need to look for payment plans with the providers of these essential services.

Know your income and available money

The Government has put in place a number of relief packages and schemes to help people through this time. Do your research or get advice to understand what income you’re earning, and what support might be available. This will help you determine your available funds and how they can cover your essential expenses.

Pause or cancel the non-essential expenses that don’t fit within your available funds

Write down your current direct debits, and identify those that you can cancel or pause. Free up that cash flow for your essential expenses.

Set up a “survival bank account” that only essential expenses are drawn from

Set up a bank account separate to those that are linked to your direct debits and automatic payments. Deposit enough income into this account to cover all of your essential expenses. Do not link any other direct debits or payments to this account – so that no unexpected deductions are removed. That way you know your essential expenses are covered.

Use cash where possible

Instead of using your ATM card, take out cash and use it for your essential items such as groceries and fuel. It’s easier to monitor your spending when using cash. The unconscious “tap and go” can make it harder to keep track.

Cook more at home and limit your takeaways

For many clients we see, takeaways are a huge expense. Planning your meals, buying only what you need and cooking at home can save a lot of money.

Control your impulses

In an emotional and stressful time, impulse buys can seem like a good idea – but can drain your funds and leave you in financial trouble. We recommend unsubscribing from retailers’ email newsletters and other communications that can tempt you – at least for the short term.

Embrace technology and use free budgeting apps

There are so many free tools available to help set up and manage your budget. Many banks offer budgeting templates and a range of tools and apps are just a Google search away. You can access our own budget planner from our website. 

Set aside a couple of hours to go through your budget and identify the non-essentials that you can cancel or pause for now. It’s an exercise that is useful and important not just in these challenging times, but even when the recovery comes.

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