First of all it is essential to know exactly what you earn. And that means after tax and other deductions from your workplace. With taxes and national insurance costs likely to rise in the coming years, getting a good fix on how much money you are left with after all deductions gives you the confidence to attack the rest of your budgeting process.
If you don't know what your monthly running expenses are then write them all down for a couple of months as they occur. And that means everything from money spent on lunches to sweets and newspapers. Once you know what you are spending then it is easier to start to prioritise those which are important and those which may be sacrificed or exchanged for other items.
Round expenses up so as to build in a small buffer. Budgeting is not an exact science so make sure that expense items are fully covered by adding a little and rounding to the next £10 or £50 amount (depending upon the item!).
Similarly, round all income sources down! That way you are ensuring that there is a built in small buffer each month to compensate for any errors or unexpected cost items.
Try to save something each month. The aim is to build a reserve fund that could cover at least six months or normal family expenditure should a disaster happen. That could be losing a job, having an illness for which you get no long term sick pay or unexpected bills such as a roof repair. Should the worst happen, this reserve will get you through until you get another job, get better or adjust your lifestyle.
Make sure you have the money to cover and cheques you write before you issue them. Bank charges are high and paying for a bounced cheque can cost up to £75.
Changing ingrained habits takes time and effort to adjust so do not budget for big changes too soon. Phase any changes in over time so you can adjust slowly but make sure that you do change.
As leader of the household budget you have a duty of care to set a good example to the rest of the household. You cannot expect others to change unless they see you making some effort and a desire to change. This is especially so with younger children.
Keep a record of your changes and celebrate successes with the family when milestones are reached.
Budgets are movable feasts so make sure to update and revise as circumstances change. More income or a healthy reserve means you can afford more or switch priorities. The important thing is to make budgeting a part of you financial household management and stay in control. It should not be a chore but a useful tool in making the household tick smoothly along.
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