Wednesday 27 October 2021

Budgeting Tips!

There are many ways to save yourself money. Some are easier than others, and can be done easily and somewhat quickly, and others take a bit more preparing and can take longer. You can get savings accounts to help manage your goals, use piggy banks to save spare pennies, and even save up points on loyalty cards for later use.

I am in no way shape or form a budget guru, or a money expert. I've just tweaked a few things in regards to my money in the past two years that have helped me out. Granted, I'm still not 100% on not taking money out of my savings here and there, BUT I have taken out a lot less since January 2020 due to budgeting.

Here's just some ways I save myself money, and budget my month to try and keep my spending under control.

Cash Envelopes

My favourite by far is the cash envelopes system. You can get fancy envelopes off Amazon like mine, or just use plain mailing envelopes. Assign a category for each envelope and then put your designated amount in each one. That is there your budget for that category each month. Some categories that I have are:
  • Food shopping
  • Fuel
  • Toiletries
  • Dinner out
Take your pay, set aside any savings, rent and bills, and then whatever is left, assign to each category. Sometimes you won't need that category that month, so you may not need to put your money towards it. Others you know you will use weekly, such as food shopping. I get paid monthly, so I need to make sure that whatever is in mine can last me four weeks.

Sinking Funds

Similar to cash envelopes, sinking funds are alike but are for set dates and targets. You know when Christmas is each year, so if you want to save £500 by December and it's currently January, you would divide the £500 by how many paydays you get between then and whatever date you want it ready for in December. I get paid monthly, so I know I get 12 paydays between January and December, so I would want to put £42 aside monthly to achieve this goal. Some category ideas are:
  • Car maintenance
  • Medical
  • Christmas
  • Holiday
  • Disney+ annual
Again, you can tweak this. You might have an extra £20 spare one month and want to put it towards one sinking fund in particular, or maybe you're short one month and can't do that £42. Just adjust where you can, and if a category isn't working for you - stop it and distribute that money to the other categories!

Savings Jars

I have a couple of different coin jars for loose change that I bag up at the end of the year and deposit into my bank account. I save all my 1p and 2p coins in one, and will bag these up through the year and save aside until I need to put them in the bank, as this one fills up the quickest. I also have one for £2 coins. This is a rare coin to come across often, so the jar I have for this will only be emptied every couple of years, just so I can save a better amount! The last one is a 5p, 10p, 20p and 50p jar. All the silver! I don't always fill this one as sometimes I know I'll need change for something, but I will add in now and then. Anytime I have more than about 3 or 4 of each denomination, then that goes in the jar regardless.

£5 Note Challenge

Similar the the savings jar, this is one I came across online back in late 2019 and I thought it was great. Granted, back then I was using cash a lot more than current times, so this was easier, but I've still tried it this year. Every time you come across a £5, it goes straight into a spare envelope and I'll set that aside for the year. Now and again, I will take one out for a charity donation, but otherwise I tend to leave it alone. This year I've managed £80, and only £10 of that has come back out. Not bad, considering I've mainly done card transactions all year!

Track EVERY Transaction

Possibly annoying and time consuming for some, but I find this extremely helpful and motivating. You really get a good idea (and sometimes a scary shock!) when you see all of your purchases laid out before you. Something as small as a 99p game for you phone, to a £200 gadget needs to be logged. At the end of each month, go back and highlight any transaction that you really didn't need, or was an impulse buy that you now regret. Try and keep an eye on the highlighted ones, and try not to buy those things again, or at least frequently. 

Have Different Savings Accounts

I have a savings account for my general savings, emergency fund, and retirement. My general is a slow builder, but is there if I accidentally go over in a cash envelope category, or maybe I finally decide to get a new laptop after all and didn't want to save slowly for it. I do try and leave this alone where I can, but I do dip into it now and then.
An emergency fund is usually around £1000 for most people - and it's the same for me. This amount cannot be touched, for anything other than an emergency. Maybe my car completely breaks down and I need a replacement to last me until I can save for a better one. Or my phone falls into water and I need a new one ASAP for work, then that is a reason to break into the emergency fund. It's also really good to have this for peace of mind! Retirement is something I only recently added as a category for my savings. This, again, cannot be touched until I retire in another 40+ years time!
Having these savings in separate accounts means you can see the totals a lot better and keep an eye on the amount rising!

I hope some of this was helpful to you, and if you have any questions about anything, please do ask! What budgeting tips would you give to people looking for help? Let me know! Hope you have a great day and keep safe :)

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