There’s so much in life that we can’t control, like rising inflation; rising interest rates and the cost of living.
It can feel very overwhelming like you’re drowning helplessly trying to keep your head above water or trying to keep it all together for your family.
So I thought I would share some budgeting tips that someone shared with me years ago. Budgeting has helped us to stay on top of our household costs and create a savings plan that helped us take control of our income.
Full Disclosure – I am not a financial advisor, just simply sharing my own experiences.
4 Steps to Establish Your Budget
1. Make a List
Print out the last 3 month credit card and bank statements and make a list of everything you spend money on, and group the costs.
E.g.
- Entertainment (this may include dining out, movies, drinks, Events)
- Travel
- House Hold costs – I would suggest keeping these separate so you can see what you’re spending each month on utility costs.
- Gas
- Electricity
- TV Packages
- Amazon
- Subscriptions – I would list these out individually
- And so on…
2. Prioritise your cost list
Once you have your list then go through and prioritise it. Starting with you can’t live without – electricity, groceries etc through to your nice to have’s.
This exercise will help you to understand the costs that you can live with and the ones that you can live without.
3. Determine Your Disposable Income
I find it easy to use a spreadsheet when I budget our household expenses. So add all of your costs into the spreadsheet and then add a line to include your income. You can formulate the spreadsheet so it can show a running tally of disposable income which is dependent on the changes you make to the rest of the budget.
You can either create this yourself or download my template here.
4. Create a Savings Plan
Now you have full visibility of your costs and total household income you can start to see where, and by how much, you can save money each month.
You can then put together a monthly savings plan and start working towards other financial goals.
The key to a successful budget is creating one that you are able to stick to!
