How to plan for monthly and quarterly spending

Budgeting your finances shouldn't be a scary task!  You may think "I can't do this, I'm rubbish at maths" which you can get out of your head right now, just because your learning wasn't at the same rate as the rest of your class, means you learn at a different speed!

If it helps, think of a budget as planning and goal setting, not maths, it can be quite exciting!

To avoid debt and the stress that comes with money we need to budget not only to ensure our money lasts the month/week but also to ensure we can put money away for something specific.  Ideas on what budgeting can be used for can be found here.

Once the plan has been set up, and this will take up some time so ensure you have set aside an adequate amount of time for this, once in place, it is a simple task of monitoring each month to track your spending.  You can then start analysing each spend and see where you can make cuts or review where savings can be made.

Creating a Budget Plan

Start simple. I use google spreadsheets, and at the top of the sheet the first column has my description and the second column is used for the value.  That is all we need.

Following on from your income, list all your outgoings.  Use a bank statement as a guide to remind you what you have spent on what.  For completeness and something debt management companies will include is quarterly and annual spend, such as car tax, subscriptions etc.

The spreadsheet will be able to total the outgoings (this is a simple sum function).  The value left when you take away your income from your outgoings is your surplus cash, if your outgoings are higher than your incoming it is called a deficit, and you will need to focus on reducing this immediately.

For expenses that are paid out quarterly or annual, these need to be included.  This is very important.  If your budget list is monthly, divided quarterly bills by three and ensure you do not spend that allocated money, when the bill comes in you would have put that money away already.

The same applies to annual bills, divide the cost by 12 and take out one 12th a month from your income and put it in a savings account so you are not tempted to spend it.  When you have a £210 annual bill, you will need to put away £17.50 a month for when the bill comes in.

Budgets can seem overwhelming and daunting but once you start, keep going, the end result is worth it.  If nothing else, it will give you clarity on where your money is being spent, and this will help you to begin making plans.

What is your goal?  With your budget plan in place, you are now one step closer to your goal.

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