Your budget doesn’t have to look like anyone else’s; it’s meant to be a personal way to save money bit by bit, and your household might not run on the same rules and revenue as your neighbour’s! Who knows how they manage to afford to go on holiday every single year during the peak summer season?
You have to make sure your budget works for you, and looks like something friendly and capable in your eyes. You’ve got food to put on the table, and you’ve got bills to pay to keep the heating on and the water in the tap – are your tariffs the same kind of price the rest of the country is paying? Probably not!
And so, to better help you put together a budget that’s going to work for you, here are a few things to remember.
Take Stock of Prices in Your Area
The prices you have to deal with in your area are going to make a big difference on how much you can save each month, how much can go towards your leisurely activities, and ultimately, how much you’re going to be able to spend on groceries and other necessary household goods. After all, if you live in an expensive borough, you might not be able to put as much food in the cupboards for £50 a week compared to someone who’s 50 to 100 miles away from you. It’s one of the main reasons a budget cannot generalise!
Take it Year By Year
If you take your expenses year by year, instead of on a monthly basis, you can properly take into account your salary, your partner’s salary, the amount you’ll need to pay in tax for the current financial year, as well as the yearly billable amounts for your house bills, rent or mortgage, food and household good prices, as well as any other utilities. It’s much easier to look at the bigger picture before trying to get into the details!
Budget for Emergencies as Well
Budgeting for emergencies is hard, of course, simply because you have no idea when one will strike, or what it’s going to cost you. But when you take into account the most likely emergency situations – anything from a medical ordeal, to losing your job, to needing to hire family solicitors – you can work out an average price for each one. And make sure you’re looking at the prices within your area!
But even then, how much should you save? Well, emergencies are a big deal, when it comes to your finances, so you’ll need a good amount. As a rule, you always need to be able to pay for at least half of the effects an emergency can bring your way – the insurance you have, if any, will cover the rest!
So, what should your budget actually look like? Most of all, something you recognise and could find useful. You need to be able to put it into practice, after all.