Are your personal finances giving you a headache? Do you know how much you’re spending and what you’re spending your money on? Do you think you should save money for a rainy day but just can’t seem to find any money at the end of the month?
Setting up a budget is a great way to get a handle on your financial situation, to plan for the future and to sleep well at night.
In this week’s video I explain how I budget for things and how this doesn’t mean I track every single purchase in a spreadsheet.
Creating a budget gives you the facts – you will see black on white how much money you earn, how much you have to spend on fixed costs like rent/mortgage, bills, groceries and transport, and how much is leftover for discretionary spending and – of course – savings.
Here are some categories I suggest you include in your budget. Add as many items within each as you need:
Income
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your salary
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any other income, e.g. freelancing, etc.
Expenses
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Housing, e.g. rent/mortgage, home and contents insurance, council tax
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Utilities, this includes electricity, gas, oil, water, phone, internet
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Transport, e.g. train and bus tickets, car payments, car insurances, taxes and petrol/gas, repairs
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Subscriptions, such as Netflix, Amazon Prime, Audible, professional memberships, Spotify, etc. (these can add up, so be sure to check what all the things are you’re subscribing to)
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Groceries and household supplies: this is likely the one category where you spend a lot of money but may not know exactly how much, unless you’re tracking it or categorizing your card payments.
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Personal care, e.g. hair dresser, cosmetics, hygiene products
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Clothing and shoes
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Pets, including food, vet bills, insurance, supplies
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Entertainment, including eating out, alcohol, movies, taxi fees (unless you capture these under transport)
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Hobbies, e.g. gym membership, bike repairs, music lessons
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Savings & investment: I recommend adding this category even if you’re currently not allocating any money to it. That can always change 😉
In future videos I will dive deeper into the various aspects of budgeting and saving, but for now, this is a great way to get started: