Knowing how to budget, even with the smallest amounts, is a skill that will always stand to you.
What is a budget?
Budgets are essentially a mini road map on how you’re going to spend your money over a certain time period. If you learn to be a brilliant budgeter, making decisions around what you spend will become a lot easier, you will be in greater control of your money and feel more financially confident.
Why make a budget?
Budgets are always going to be useful. Not matter what your plans are. Whether you’re working part time while in school, planning for a fun event or even planning for the longer term and your life post- secondary school, a budget will help you to:
- Plan to pay for the things you feel you need
- Get a clear view on where your money is going
- Highlight where you might need to make changes to your spending
- Fast track you to reaching your savings goals
- Focus you on saving for your future
- Reduce any money stress you might be feeling
- Create an awareness for debt and how to avoid it
Top tips when creating a budget
Budgets are unique and personal to the individuals who create them. So, when you start yours, be realistic about what you can achieve personally. Here are some top tips to help guide you:
Decide on your goal: Maybe you’re planning to save for a trip aboard with pals, or maybe you just want to get better at managing how much you spend versus how much you save. Once you have a clear goal set, it will be easier to stick to your budget.
Know how much you have to spend: To be an effective budgeter, you’ll need to know how much you have to spend each month. Make a habit of jotting down the money you get from your part time job, pocket money and or from your most generous rellies and friends on monthly basis and also make a note of the money you spend e.g. socialising, transport etc. What’s left is your budget for the month.
Tweak and make adjustments: If you discover that your spending outweighs your saving, then you’ll need to rebalance things a little. Think of ways you might be able to get more income in e.g. paid chores around the house or with extended family, offer a grind service to students in your school. If you’re musical, piano lessons would pay dividends. Also consider where you’re spending unnecessarily. Maybe your monthly spend on clothes is high. Try vintage shops if your habit is insatiable or set yourself limits on how often you buy things.
Review often: Things change and with that so will your circumstances. So, make sure you set aside time to review your budget every few months to make sure it still suits your circumstances.
Don’t give up. It might take a few attempts to get your budget right, but practice will make perfect. And you’ll be glad you stuck with it!
