Keeping a budget - the basics
A budget is a financial plan for saving and spending money. Now more than ever keeping a budget seems to a necessity and by budgeting properly you could end up saving a small fortune. Drawing up a budget is something that's personal to you and your own circumstances. Making a note of what's coming in and what's going out of your account each month is the basic principle of any budget; it's only when you see where your money goes, that you can make changes to curb any unnecessary expenses. That way, you'll not only be saving money but making decisions that could change your finances for the better.
Before you start, here are some useful tips
- Set up a basic budget by taking note of your money that is coming in and going out. Try our handy budget calculator to help you keep track of your finances.
- Remember, be honest with yourself and try to include everything you spend.
- Not sure where your money goes? Print or view your bank statements online to help you identify your income and outgoings. Try keeping a spending diary for a month. You'll be surprised!
- Be aware of your mortgage repayments or rent every month and note the day of the month that the money is withdrawn from your account.
- Remember to include the things you only pay for once a year, such as management company fees or annual car tax and insurance, by estimating and dividing up the average that you'd spend in a year. Don't forget to insert any current debt repayments you may have into your outgoing commitments too.
- Identify areas where you are overspending, ask yourself if it is absolutely essential? Could you make reductions such as switching utility services to a cheaper provider or change your grocery retailer to a more competitive one?
- Check your bank balance frequently online, on the phone or at an ATM.
When you input all your income and outgoings on our budget calculator you'll get a clearer picture of the state of your finances so you can plan better in the future.
Now that you've taken a closer look at your finances, you'll be able to see areas where you can make changes if they are needed. You might surprise yourself and find that you have been doing the right things all along! The next step is to keep on track.
Good budgeting habits and managing the day-to-day
Day-to-day management means knowing when you have money, when you need to pay things off and when you need to be more careful. Being good with your money doesn't mean thinking about it every minute of the day; it just requires good habits at key times of the month or week.
To budget effectively, remember to review your budget regularly, especially if there are any changes to your circumstances to make sure that you're living within your means. Try a few of these helpful pointers.
- Try to save part of any pay rises or bonuses.
- Be realistic. Know your weak spots and allow for a little unplanned spending now and again. Why not set up a standing order direct to your savings account?
- If you don't have a savings account, open one up today and transfer any spare money you have at the end of the month into it and try to set up a regular standing order.
- Avoid impulse buying! Plan your expenditure in advance and try not to over-purchase.
- Set up Direct Debit payments, so you can pay your bills on time and when you know you have money to pay them with. Try to move standing orders and Direct Debits until just after payday to avoid surprises at the end of the month.
- See if spreading your larger payments over the year rather than paying a lump sum by Direct Debit might suit you better.
- Apply for an overdraft in advance if you think you might go overdrawn, but try not to get used to having an overdraft, use it only as a temporary arrangement.
The key to managing the day to day spending is to focus on your budget and make reductions were necessary.
Tips on how to reduce your expenses
Now that your budget is in check there may be some quick and simple things you can do to save money in the short-term.
- Switch to cheaper utilities. To see if you could save on your gas and electricity bills, by changing to a more competitive supplier.
- See if companies offer discounted rates when you pay by Direct Debit.
- Lots of companies offer short-term bonuses or incentives - make sure you know when these run out so you can check you're getting the best deal.
- Make sure you know what statutory benefits you are entitled by logging onto welfare.ie
- Compare quotes for car or home to make sure you're not paying too much.
- Are you paying too much tax? Could you get a tax refund? Check to see at revenue.ie
- At EBS we offer a free Financial Review to customers, to help you identify your financial needs. Why not arrange an appointment to see an advisor at your local branch today.
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