Budgeting

Hi Jasmine,
With times getting tougher, I figured it was time I started proper budgeting but I don’t have a clue where to start! Could you give me some advice on the best way to make a budget. I’m on a fairly low salary so would you recommend doing a weekly or monthly plan?
Thanks!
Jessica

I’m glad you’re thinking about budgeting Jessica. Really, none of us can hope to run our money properly unless we know what’s coming in and going out each month.

First of all get a piece of paper and put two columns in it. In the first column, put a list of the money you get in each month (salary, tax credits etc) and add those up. In the second put in all your essential outgoings each month (rent, utilities, transport, food etc) and add them up (you can do this online as well at the FSA’s Moneymadeclear website http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=budget_calculator).

Then take away the amount you have to spend each month from the amount you’re earning and that will show you how much money you have to play with once you’re essentials are covered.

As you are on a low salary I suggest that you break it down into your weekly spend (just divide it roughly by four) and remind yourself that you can’t spend more than that each week. If you’re finding it hard to stick to that regime then get rid of your credit cards (except for one emergency one), take that exact amount out of the ATM every Monday and only use cash through the week. It’s a good way of checking that you don’t spend more than you’re allowed each week!