Monday, 24 August 2015

How I Budget

When you move out of your parents’ home then budgeting is something which becomes very important, mostly because if you forget to budget sometimes you find yourself with another week until payday and only some less than healthy looking carrots and pasta to survive off (but a really great set of new comics to amuse you and some lovely perfume). This is particularly true if you’re not really used to having as many responsibilities, or as much money coming in. The latter was my situation, as the bursary which comes with my PhD is my first time having any sort of real long term income and is more than I was getting over my previous summer holiday work. I was doing great for the first few months, being used to not having any income, then I realised I had actual money and managed to spend it all a bit quickly.

So yes, budgeting is very important. Even if you have more money than you know what to do with it’s a handy skill to have really. There are a lot of different ways to do this, a quick google search will turn up several for you to try, the most important thing is that you find and use a method which works well for you.

All of that being said I’m going to share how I budget, maybe this will be helpful for someone:

The first thing I do is to grab a piece of paper and write down how much money I have coming in each month at the top, in other words write down my monthly income. For me this is just from my bursary, but others might have a bursary/student loan, a job and maybe money coming from from something like your blog.

Then underneath I write all the set monthly expenses. These are the ones which I have to pay, that are always the same value every month (the easy figures to work out); rent, phone payment, driving lessons.

Once that’s done I do a quick bit of maths to work out how much is left over for me to take any other expenses out of. Then I start writing down some of my more flexible expenses; electricity, savings, food. I'm lucky enough that I know how much I tend to spend on each of these anyway but the first few months might take a bit of guesswork and maths, once you’ve been doing it a while it gets easier.

A little more maths later I know how much I have left and so I budget a certain percentage for “fun” money, for any shopping I want to do, or if I go out. The rest I keep for emergencies and it then goes into my various savings accounts on the next payday.

Once I have all that organised I head to the nearest safe cashpoint and take out the money for my food, fun, driving lessons and electricity (mine is pre-pay meter). Phone and rent both come straight out of the bank so that’s sorted for me.  I keep all the money in a safe, secure, place separated up into envelopes. This just stops me from going over budget, not everyone would find it necessary.

As far as my savings accounts go I have my main one, which is where I put most of my savings, and a smaller one which allows me to save up for gift buying and things like conventions which can be pretty expensive trips for me. I tend to split money between them 60/40 or 70/30, mostly because the main account is saving for my future.

So that’s pretty much everything from me, what about you guys? Do you budget? What’s your technique?

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