I’ve mentioned before on this blog that I used to be terrible with money. I used my credit card like a second bank account and I was always in my over-draft by the end of the month.
Fast forward to 2017 and I now manage to save 51% of my income and I’ve stopped filling my home and wardrobe with items that I do not need.
I’ve managed to do this not only by practising minimalism but by setting myself a monthly budget for EVERYTHING. I pay monies into my savings account first before I budget out what I have left. When I first started doing this I had to work out what the minimum amount of money was that I could live on and then made the decision that I would save the rest.
It took a few months of recording what I was spending my money on, analysing it and working out what was necessary and what was a waste of money. I knew after these first few months what my budget would need to look like and realised that I could save some serious money for my future.
I don’t feel comfortable sharing information about the figures but I thought it might help others if they see exactly what I budget for in a month. Not every item listed is used every month but these are the items in my template. For example if I know tax or an MOT is due for my car I’ll add a budget for this for that month and adjust something else. There are other ways to budget that may suit you better I.e create a budget for the whole year but as I have been building an emergency fund I find I can set a budget just for the month in hand.
First up are household bills. These are committed costs and are the first thing I budget for.
Electricity / Gas
Next is savings and an emergency fund. The main reason I need/want to save so much of my income is to facilitate buying a house. We’re hoping we can do this by the end of this year. I’ve also been putting a small amount of money into an emergency fund for just in case situations.
The rest speak for themselves really but notice what I have left till last (Life, etc). This is where the room for changing my monthly budgets comes from. What I have available for entertainment and gifts for others completely depends on my other expenses for the month.
London Travel, Taxi’s
Tax, MOT, Service
Gifts – Bdays & Xmas
I don’t budget for holidays at the moment as we don’t have any plans for booking anymore this year. This year is all about saving for a house deposit and that’s okay with me. We already have a long weekend planned in New York in June and a long weekend on the Isle of Wight in May to look forward to!
How do you budget your income? What financial goals do you have right now?