New to budgeting? We know how daunting it can be when you’re a beginner trying to make the most of your monthly income and you’re certainly not alone if you’re unsure how to budget your money. It’s estimated that around 20% of Brits struggle to save any money month by month and that tends to be down to a lack of budgeting and savings knowledge.
It’s worth noting that there tend to be plenty of reasons why saving is difficult such as emergency car repairs or the current cost of living crisis. That’s why you shouldn’t be too hard on yourself if you fail to budget well every month.
However, to give yourself the best chance of saving some of your hard-earned cash, we’ve put together a handy guide for saving that beginners to use. These can be applied to just about any income, so give them a try and you may see your balance rising over the next few months.
Get organised
Set some time aside to get your financial plan in order. This is all about creating a budget goal and deciding how much you’d like to spend each month. To get an idea of how much you could potentially budget, take a look at your spending habits to see how your income is currently being spent. This should show you how much money you have left over after you pay your bills and how much you spend on leisurely activities.
Write your budget down
Beginners should focus on putting money into three separate pots: bills, savings and spending money. A good method for beginners to use is the 50/30/20 rule, which means 50% goes on bills, 30% on fun and 20% for saving or paying debts.
This rule tends to work well because it’s realistic and attainable, which means you should be able to hit your goals consistently, ensuring your present and future financial situation is taken care of.
Focus on clearing your debts first
We understand you may want to improve your savings balance but having debts looming over your head can make it difficult to budget with most of your spare income being paid to the company you owe money. Seeking professional help through debt settlement services can be an effective way to reduce your debt burden and regain control of your finances. Clear this debt first and you should have some extra funds to either spend or save and this can help you improve your credit score at the same time.
Get rid of subscriptions you don’t use
Subscriptions or memberships that aren’t being used are a waste of your money and you can easily cancel them, so you have more funds to spend on things you really want to do. Take a look through your bank statements to see what you’re paying for and cancel the ones you rarely use.
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