Why a budget needn’t be boring!
The word ‘budget’ doesn’t get too many of us excited. But if you do it properly, you should have more to spend on yourself!
Start with the 50/30/20 rule
This is a recognised way to start budgeting, although it won't be for everyone.
Here’s how it works:
- Set aside 50% of your income for essentials like rent, rates and bills.
- Then keep 30% for wants – eating out, clothes, coffee, cinema. You may even want to open a second bank account and transfer your 30% ‘wants’ money in there to easier keep track of what you’re spending.
- Then put the remaining 20% into savings, if you have a savings account. Or just set it aside. If you can save anything at all, that's a great place to start.
You may also want to have a look at MoneyHelper’s budgeting guide
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Why would I save?
Saving is a great idea if you can afford it. It’s always a good idea to have a rainy day fund in case you’re hit with an unexpected bill, as well as to save for holidays, deposit on your next house, new car, and so on. And don’t forget you earn interest on your savings too.
How to manage living expenses if sharing with others
Setting up a household bank account, from which all the bills (including the rent) are paid, could be a good idea.
Do up a spreadsheet and work out what your own share of all the bills will be.
Then set up a standing order for every payday and have your share of the bills whisked away to the bill account before you’re tempted to spend it!
Divide up annual costs
There are some costs that you may not be able to pay in instalments, like heating oil. But if you work out a monthly equivalent and set that aside, you'll prepare for the lump sum when it comes along. The same applies for something like car tax. This where a savings account can be a good idea.
Match your outgoings to your income
And by that we mean – if you get paid monthly, try to pay your bills monthly.
If you get paid weekly (and it’s possible) see if you can pay any of your bills at that frequency.
See if you can change the dates of your regular payments to be as close to payday as possible - it's easier to budget with what's left when your bills are paid.
