Planning a Budget: Important Things to Consider

Hey Cats,
Budgeting is one of the most important things you can do when it comes to making sure that you have the security and stability you need in your day-to-day life. When you budget, you can save up for the things you need faster, and maintain a solid idea of where your daily cash is going.
Provided you stick solidly to your plan, a budget can help you to keep on top of your spending habits, and ensure you don't waste more than you earn. The key is making sure that you know how to set an effective budget from day one. Here are some of the things you should consider before you get started.
  1. Know Whether You Need a Budget or a Loan

Sometimes, a budget can be a great way to save up for long-term things, like a vacation, or paying off your mortgage. However, it's not always the right solution - particularly in emergency circumstances when you need help as quickly as possible. For instance, if your boiler breaks, and you need a replacement, the chances are you can't simply afford to wait for a few months, or even years, until you have enough cash for a new machine. Instead, you might need to consider borrowing money, which you can pay back at a time and pace that suits you.
Make sure you know why you're thinking of developing a budget before you get started. It will help you to figure out whether you can realistically save and meet your goals, or whether you might need an alternative course of action.

  1. Have Specific Goals in Mind

If you've analyzed your situation and determined that you do need to budget, then there's a good chance that you already have an idea of what you want to achieve in mind. For some people, the end goal is freedom for debt, whereas, for others, it might be saving for a house or a career change. Whatever you want to accomplish, having your goals in mind is a great way to ensure that you make your ambitions a reality.
Remember, budgeting will often involve making some difficult choices. You'll likely have to cut down on some of your favorite things and being able to envision your goal could help to make these sacrifices more palatable.
  1. Know Exactly How Much You Spend

When you begin to plan your budget, you'll find that you'll get the best results if you plan according to real numbers. In other words, you'll need to pull out all your receipts and bills over the last month or two and figure out what you've been spending. Before you can determine exactly how much money you can cut out of your monthly bills, you need to know what you've been spending on average.
Remember, keep your irregular bills and expenses in mind too, such as auto insurance, homeowner's insurance, property taxes, and so on. These bills shouldn't just bee unexpected surprises, but something that you plan for throughout the year.

  1. Be Realistic

Budgeting is often a difficult, and complex thing. You're pushing yourself to do something that you'd rather not do - like give up on your Netflix subscription, or reduce the amount of coffees you buy each week. That means that you're not going to get results if you try to cut down on too much at once. Instead, you simply increase your chances that you'll fall off the wagon. Smaller steps are more likely to bring in big results.
Don't promise to stop your spending by about 80% each month - as this isn't going to work for the long haul. Instead, just plan to cap out about 10% below your monthly average. After a bit of time, you can trim a little more, until you get down to your ideal figure.
  1. Track Your Spending, and Adjust When Necessary

Finally, once you've finished drawing up your budget, it's important to watch yourself and figure out how well you're sticking to the rules you've put in place for yourself. If new expenses emerge, or you face problems that might stop you from following your budget as stringently as you should, then you might need to make some adjustments.
Generally, you should be revisiting your budget on a monthly basis. This will mean that if you find that you're constantly overspending, you'll notice the problem and you'll be able to adjust and align yourself faster before you have too much of a negative impact on your finances.


  1. Some good tips have to say I like to know what I spend it is very good to track as you say can be very useful.

  2. It can be really hard to budget for things sometimes as you never know what might crop. I'm trying to save for a car at the moment, it's not easy!

  3. Great tips! I find it so hard to budget, especially around Christmas time. I just want to spoil myself and everyone around me!!

  4. I never used to budget at all and used to struggle so much getting through a month. Getting older and having kids has helped me massively. I'm so careful with money but also allow great treats :) fantastic post x

  5. I'm trying to keep a spending log every day so I can figure out an average of how much I spend each month!


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