We often hear about budgeting and automatically have a generalised understanding of what it means and how it works, but when broken down, there is a lot to take into consideration. In simplest terms, budgeting is a spending plan that you create to help you achieve a financial goal, such as purchasing a house, a car, or a holiday.
Budgeting can involve a more complex list of financial expenditures, but at its core, there is no right or wrong way to budget. There are lots of popular formats to learn budgeting, such as the 50/30/20 method. The 50/30/20 method suggests that you spend about 50% of your monthly earnings on necessities, 30% on wants, and 20% on savings.
Why is Budgeting Important?
There are multiple benefits to budgeting, not just for those who struggle financially and are looking to get “better” with money. Budgeting encourages you to live within the means of your budget and to work out what’s possible. You can think of a budget as a stepping stone to your financial ambitions and goals.
Understanding Your Relationship with Money
Understanding and tracking your expenses helps determine how much you have to save and/or spend. Once you have been able to identify any patterns within your relationship with money, you can make adjustments.
Money causes a lot of us stress and anxiety, but by budgeting, you can help manage your finances and prepare for rainy days. Here are some steps to help you on your budgeting journey:
If you need a little outside support, there are a range of organisations that can help you. Below, we have listed some organisations that can help you help you budget.
Citizens Advice can offer advice and support concerning debt management, budgeting, benefits, and much more. Why not reach out and speak to your local Citizens Advice to see how they could help.
Citizens Advice “Work Out Your Budget” Tool
As one of the UK’s leading charities, Age UK can offer support to people aged over 66 that are struggling financially. For more information, or to see how Age UK could help you, visit the Age UK Website.
Money Helper, formally known as the Money Advice Service, offers a wide range of guides to managing money–especially during unpredictable times. They also offer free, confidential debt advice. For more information, visit Money Helper’s Website to see how they could support you.
Money and Finance Support
Disclaimer: This blog post was written and shared by Health Service Discounts and is intended to inform readers about the topic at hand. Before engaging with any financial product, please speak to a professional.