This blog is for people like me... not life’s natural ‘savers’ (I’d be first to empty out my piggy bank to buy sweets, while my sisters slowly filled theirs…)! It’s for those of us who need the tools and tips to budget and manage our money.
It was great when I took part in one of NatWest’s MoneySense programmes at school. It got me thinking about budgeting, planning ahead and managing my money. They’ve got some brilliant resources which are worth looking at whatever stage you’re at, like this article on budgeting and these super-useful videos.
Where I went wrong
I spent a year working full-time (and supposedly saving) after leaving school. I was living at home, and in theory should have been able to save each month. Unfortunately, having disposable income for the first time in my life, I got carried away! I had promised to give my parents money towards bills and food, but I splurged on concert tickets, holidays and clothes, leaving me with very little at the end of the month. So, I didn’t always give them what I owed.
I also didn’t save as much as I’d intended.
My mum sat me down to have a chat with me about money. I realised that while I knew it all in theory, I had to actually put it into practice! She assured me that I’d feel a lot more in control if I could cover all my expenses and learn to look ahead and see what outgoings I needed to account for. It might require some self-discipline, but it would be a lot less stressful in the long run.
Learning to manage my money
I started university and took out a student loan, which I worked out would cover rent and bills.
For everything else, I’d have to use my (very small) savings pot, and also work part-time.
The first thing that shocked me was all the outgoings that I'd never thought about while living at home. Things like A TV licence, toothpaste, toilet roll that I'd never had to buy myself!
I found that I could cover most of the basics like food, travel and bills via my loan and savings. But obviously, I wanted money for other things too — clothes, going out, making my uni room look nice. That was where a part-time job came in. I worked in the student union bar, and that made everything a bit easier.
Though I hate to admit that my mum was right, she was bang on the money (excuse the pun). My friends who racked up credit card debts and overdraft charges got really stressed and anxious. I was able to sit them down and help them with budgeting. How I ended up as the sensible saver I don’t know!
Here are my top tips to help you budget like a boss:
Get real: work out exactly what you have coming in and going out — be thorough and honest with yourself. Yes, those coffees and snacks count...
Ins and outs: what do you have going in? What do you have going out? And when? Then, if you need to, you can look to decrease your spend, or save more, or both.
Use the right tools
: when working out your monthly budget, you can use apps like Snoop
. Do what suits you! Create your own spreadsheet or start a written money journal — just make it work for you.
Make adjustments: at Christmas, I wanted to buy all my friends and family presents. My monthly outgoings went up loads and I had to cut back on other things — when money’s tight you might have to make sacrifices (and sorry everyone, next year I’m making you all biscuits).
Needs vs wants: I had to be strict with myself when working out essentials (like rent, bills, food and travel) versus all the rest. It’s important to get your essentials down though, so that you know what you have to cover before you can think about everything else.
Get the ratio right: The ideal monthly spend should be 50% of your budget on essentials, 30% on the rest, then 20% goes into savings or paying off debts.