The high cost of living in today’s society, wherever you may be, has made budgeting a priority among families. In today’s inflationary world, nothing is more important than knowing how to wisely spend the income that you get.
Financial problems usually arise due to lack of proper budgeting skills, or failure to keep to the proposed budget. No matter how much income you may have, it is still important to keep track of your assets and liabilities, your earnings and expenses.
It is ironic but a person who earns thousands will have the same problems with the person who earns by the hundreds. Most often, different kinds of people, with diverse income levels, have budgeting problems. Others who may have been successful in making a budget, usually fail to keep within such a budget.
A budget refers to a financial plan, taking the incoming and outgoing monetary resources into consideration. A good budget should not only mean a balance or equity between income and expenditures. It also means lesser expenses, and making an allowance for savings.
If you earn a thousand pounds per month, you should map out all the necessary expenses you will have to incur during the month such as payment for your house, food and travel. Of course, this is presuming that your tax liabilities have already been settled. What remains after you deduct your total expenses from your income is your savings.
What you do with your savings will make a difference later on, when the need arises. You can choose to keep your savings in a separate account or place it in a bank or a building society where although currently there is minimum interest to earn at least your money is safe from you and covered by the Financial Services Compensation Scheme (FSCS) up to £85,000 per person, per financial institution. With bigger savings, you can get the services of a financial adviser who can advise you on all areas not just your savings and could give you advice on managing your money and potentially obtaining some higher returns if you are able to and willing to put some of your capital at risk.
Here are tips to make sure that you keep within the family budget:
1. Maintain a logbook where you can list your income and expense account on a weekly or monthly schedule.
2. Buy your groceries at one time. To do this, make a list of all the things that you would need for your target period and purchase them at one time. Sometimes, there are discounts if you buy by the dozen so take advantage of this.
3. Avoid going to the supermarket and shops if you do not need to buy necessary items. This will keep you from making unnecessary purchases and keep you from straying away from your budget.
4. Think twice before you buy something. By doing this, you will realize that it is not really a necessity but a whim.
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