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How to make a budget & save money

Cheap Food / on a Budget, Thrifty

Making a budget gives you a clear understanding of your finances. Some people get into all sorts of trouble with debt, simply because they spend more than they earn. Working out exactly how much money you have coming in and how much is going out each month, will give you control over your finances. Once you know the facts, you can see where you are wasting money or overspending without realising.

Understanding and having control over your finances will not only help you to steer clear of debt, but it will empower you and give you an extra boost of self-confidence.

If you are already in debt, taking a good honest look at your spending habits and working out a plan of action to change those habits, is a strong first step in getting out of debt.

If you have tried working out a budget before and found it unsuccessful, it may be because you were purely focusing on the monthly spend and forgetting to look at the big yearly picture also.

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Grab a cuppa and a calculator…

Often there are things we spend money on which happen at different times throughout the year and not in any set month, for example, holidays, dentist appointments, gifts for friends and family, house or car repairs etc… and whilst you cannot always know how much these extras may cost, you can at least allow a portion of your monthly spend to go into a saving pot, which can help to pay for those events throughout the year.

Life is full of surprises and if you need to pay for an unexpected repair, or move home in a hurry, having savings put by for an emergency can make all the difference between getting things sorted or getting into debt. I know that building up savings is way easier said than done, but using the strategy below is a good solid start.

It’s going to take a while, but it is worth your time. Grab a cuppa, grab a calculator and start on the first step to taking control of your finances.

Making a budget:

1) To start off on the right foot, it is really worth being as thorough as possible. Collect as much information about your finances as possible. Gather at least three months of recent bank statements, or even take a look over the past year’s spending to see where the unexpected spends occurred. If you have credit cards or store cards, collect the statements for those to see how much you are spending there. Collect your payslips and information of any money that is coming in. Gather all the details that you have of household bills, council tax, tv licence etc. Gather any receipts that you find lying around too, as these may help you to break down further how you are spending your money when shopping.

2) Often, just looking at where you are actually spending money will be a real eye-opener. You will probably be surprised at just how much money is being spent on impulse buys, a coffee in town, a quick supermarket trip where you went in to buy one thing but came out with a basket full, a night out, energy bills at different times of year etc.. These things all add up over time and starting to have a conscious awareness of where and how you spend your money will really help you to get into a money-saving, low-cost, thrifty lifestyle mindset.

Once you stop spending so much on things that you don’t need or use, you can start to put your money towards things which make your life more worthwhile.

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Work out where you are overspending

It can be quite upsetting when you see, for the first time, where you are overspending. You may be tempted to ignore certain areas, like credit card spend or how much you spend on alcohol and luxuries. It is really important to be totally honest with yourself when creating your budget. If it helps, just keep it to yourself and remind yourself that no one will read it but you. It may help to create it on the computer and make a password-protected file. Do not be ashamed of where you are overspending, just be aware of it and make the decision that you will now be in control of how you spend and that in a year’s time your finances will be in a much better state.

3) To build a picture of monthly spend, make a list of all the regular, known outgoings that you have, such as rent/mortgage, council tax, contact lenses, any debt repayments etc. Work out the average monthly energy bill – do this by adding the last 12 months of energy bills together and dividing by 12 to get an average monthly bill – Do the same thing for your food shopping as well. Keep working out and adding the average monthly spend for things like gifts, christmas, clothes, holidays, car tax etc.

There are many templates for creating a budget online if you do not want to make your own – here is a good tool from the money-saving expert website: https://budgetbrain.moneysavingexpert.com/budgetplanner or simply Google ‘Budget Template’ to find something to suit your needs.

Now add up all the monthly outgoings and put it at the bottom of the list as your outgoings total. Finally take a look at all your income from employment, benefits, selling online etc, put that total on the budget aswell.

If your outgoings are more than your income… don’t worry, don’t feel ashamed, it’s completely normal and completely fixable. You’ve taken the first step, discovered that there is a problem and now you can take positive steps to fix that problem over time. Keep reading for a few ideas to get your outgoing spend right down.

If your outgoings are less than your income, well done indeed! Perhaps your next step would be to look at where you are overspending so that you may put more of your income into savings and into enjoying new life experiences.

4) Now that you have your budget list of exactly how much you are spending each month on average, it’s time to go through each item on the list and consider if you can make a saving.

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Each small monthly saving adds up over a year

Examples of where you might save:

  • could you live somewhere cheaper or move in with someone to split bills?
  • If you own your home, could you get a lodger to help boost income?
  • If you buy contact lenses and pay monthly, could you make significant savings by purchasing them, in bulk, online, or wearing glasses for half the week and buying half as many contact lenses? If you pay £30 per month and reduce this to £15 per month, that’s a yearly saving of £180
  • Could you set yourself a lower allowance for monthly food shopping, and stick to it? If you can cut down on your food shopping bill by £30 a month… that’s a yearly saving of £360 – You could cut down much further by bulk buying approved clearance food or by switching from brands to non-brands
  • Could you cut out one of your morning coffees on the way to work and make a free one when you get to work instead? If you cut out one £2.30 coffee per week, that’s a yearly save of £119.60
  • Could you switch energy providers and save money there?
  • Are you on the cheapest phone tariff for your mobile?
  • If you pay for a gym subscription but rarely go, could you cancel it and exercise by going for brisk walks and practising yoga or weight training in your living room instead? Cutting back on the average gym membership of £20 per month, could be a yearly saving of £240
  • Can you cut back a little on spends such as cigarettes, beauty products, magazines, take aways, nights out, cinema trips, extravagant gifts etc.
  • Can you reduce the cost of your fuel bill by switching appliances off and wearing a jumper? Check out the article Switch it off: Smarter use of energy for ways to save on household bills


Every little saving that you can make will add up significantly over time.

5) Keeping the achievable cut-backs in mind, draw up a new budget plan that you will do your best to stick to. Keep going back to it every week to make sure that you are sticking to it and to consider where there may be potential to cut back further, or to switch provider and save.

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Take control of your spending & start saving

Once you have a budget to follow, and when you are honest about where you are spending your money, you have control over your finances and can start to steer them in the right direction.

If you have trouble sticking to a food shopping budget, it may be because you are paying for food, as and when, on your card, and not realising that you are overspending. At the beginning of the month, take out the allotted amount for the month’s food shopping in cash. Divide it between 4 envelopes, one for each week, and don’t spend more than you have in the envelopes!

6) If you have a low income and the money going out is way more than the money coming in, it’s time to start thinking about ways to change that. As well as saving on the amount that you spend, there are lots of positive steps that you can take to increase your income.

Long-term financial security and peace of mind is achievable if you can just get a handle on your budget. Each time you go to spend money, check-in with yourself – do I really need it? Can I find it cheaper elsewhere?

Making a budget and sticking to it, is well worth the effort. Over time, having conscious control over what you are spending will change your life for the better.

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Switch it off / Smarter use of energy

Sustainability, Thrifty
thrifty sustainability energy saving switch off standby appliance low energy sustainable cheap low cost

Don’t leave gadgets on standby, it wastes energy – switch them off when not in use

Did you know that appliances still eat up power when they’re on standby and every time you remember to switch them off, you save pennies on your electricity bill, which over the year will add up to pounds. If you are not using your TV, Laptop, Cooker, phone charger etc – don’t leave them plugged in and on standby with the little red light showing – switch them off or unplug them until you do need to use them.

The same goes for light bulbs, do you need every light in the house on if you are only using one room? For an added bonus, instead of using regular light bulbs, switch to energy-efficient light bulbs or LED lighting which drains less power, costing you less money and they’re better for the environment too. If you want to

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Energy saving light bulbs – conserve energy and save you money

get into super-thrifty mode, use all those candles that you’ve been given as gifts to light your home for a few nights – cosy ambience and zero energy cost.

You might like to consider your water usage, aside from a small cost saving when we reduce the amount of water that we use, we also help the environment by conserving our water. A few ways to reduce your water use… a quick shower rather than a fill a bath tub… don’t leave the tap running whilst brushing your teeth… if you have a garden that needs watering, consider getting a water-butt so that you can use the rainwater that is collected instead of tap water.

Heating the home is usually the largest chunk of our energy bill so this is where you can really save some money whilst reducing your carbon footprint. If you are feeling a bit nippy, rather than reach to turn up the thermostat or to put on an electric heater, why not add another layer of clothes, a hat and a pair of socks does wonders to keep you warm as does a onesie.. or add an extra blanket to your bed. Even if you just do this for a couple of hours before putting the heating on, over the year, you will save pounds. You will also be conserving energy.. another eco win! If you do need to have the heating on, try turning the thermostat down a little, and for the hot water too – again, this will save you money.

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Stay toasty! – Wear a hat and a jumper – to save money on your heating bills

Just as popping a hat on your head keeps you nice and toasty and keeps your body heat from escaping quite so quickly, you can insulate your home to ensure that heat (and the energy that you pay for) does not escape willy nilly. If you have a loft, lay down thick insulation up there (a nice warm hat for your home). Check windows and doors to ensure that no draughts are coming in, if they are this is where heat can escape, so apply foam insulation tape to plug the leaks or use draught excluders to reduce heat-loss in the home. It’s worth being thorough because every thing you do to reduce heat loss in the home will save you money when it comes to the heating bill, and every energy conservation step that you take will help the environment too.

If you have central heating and do not need to heat every room in the house, turn the radiator right down, or off, in those unused rooms. If you find you have a radiator positioned directly under a window, this can be pretty ineffective and a big energy-loss. If this radiator is being used, close the curtains and tuck them in behind the radiator to push the heat back out into the room, there are also heat-reflecting panels which you can put behind and above radiators to produce the same result. Or simply fit a shelf above the radiator and below the window.

Being thrifty is all about looking for those small opportunities – When cooking, if you are going to be using the oven to bake something, what else could you bake at the same time to save using the oven for twice as long? If cooking potatoes and vegetables on the hob, why not get a stacked saucepan/steamer and cook both on the same ring to save using two – and save yourself from using twice as much electricity or gas.

If you have a washing machine and tumble dryer, these are both big energy users – consider hand-washing every once in a while, or drying your clothes on a washing line or dryer frame. Try washing your clothes with a 30 degrees setting instead of 60 or 90 degrees, that alone could halve the cost and amount of energy used! The same goes for dishwashers, if you use one, try to cut back on using it every time you have had a meal and wait until you have a full load or wash by hand instead, every little change helps you to save money and to conserve energy.

If you need to buy a new appliance, you can compare the energy ratings of each appliance to see which will be the most energy-efficient and cost-effective for your needs.

You may also be eligible for an energy-saving grant from the government – check here to see if this applies to you – http://www.energysavingtrust.org.uk/ – the Energy Saving Trust website also has plenty of advice for those wishing to conserve energy use in the home.

Do you have any tips to share, that will save money on household bills? Please feel free to share them in the comments section below. Thank you.

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