Budgets - explained

Budgets are basically a plan of spend, the aim is to set yourself targets for spending money.  People usually set budgets for the following reasons:

1) helping them to stay within set limits so that outgoing do not exceed income, thereby reducing not ensuring you are "living within your means"

2) to maximise the amount a person saves

3) to help save up for a big purchase eg a car

Budgets are usually set beforehand and actual outgoings monitored against this regularly to ensure you are on plan.  It is definitely a good way to manage and control your finances.

I hope this tip is useful, if you have any queries please leave a comment.

Managing your Finances

A simple tip, a first step in trying to pull together a simple statement of outgoings and income

1) Put together a basic list of all your Income and Spend for a typical month/week, using broad heading, a simple. Example is given below:

Salary - monthly

Take away your outgoings:

Groceries - weekly - multiply by 4
Clothes - very approx
Going out

You get the gist....

2) your plus or minus figure at the end of (1) will give you an idea or how much you have to save or how much you might need to cut back on to bring everything back into balance

3) if you are happy with the save amount, that's great, you now just to track actual costs on a monthly basis against your estimates, this will ensure you are managing your finances and you will feel more in control

4) if the final balance figure is just too scary, usually when outgoings are more than your income, there is more work to be done.  You will need to go back to the drawing board and look at all your spend and decide what you might be able cut back on without too adversely impacting on your life.

I hope this is useful first starter.  I am hoping to post more useful money advise in the weeks to come.

If anyone does have any questions please leave a comment and I will try and get back to you.

Thanks for taking the time to read my blog.