Our first guide is budgeting. If you want to save money having a budget makes it much easier.
This series will provide you with a step by step guide into creating a good budget. This will cover:
- Budgeting basics
- Pre-budget organisation
- Income
- Expenses
- Calculations
- Budget presentation
What is budgeting?
Budgeting is the process of balancing your income with your expenses, and saving what you can to achieve your financial goals. A budget is a plan of how you will manage your income and spending in the future.
You may not realise it, but every day you make budgeting decisions. When you make a choice between the cost of eating at home and eating out or which brand to buy at the supermarket you are budgeting.
This ‘micro budgeting’ is helpful but it is also important to have a ‘macro budgeting’ – a ‘big picture’ so you can see what you spend compared to what you earn. When we refer to budgeting in this booklet we are talking about macro budgeting.
Why is budgeting important?
- Everyone is on a limited income, a good budget will help you to get the most out of your money and avoid debts
- Budgeting can help you achieve your financial goals whether it be buying a new TV, going to a concert or buying a car
- Budgeting can help prevent you stressing over money
- Budgeting can give you a sense of control over your finances and your life
- If you can see where your money is going, it can help you manage your expenses more effectively
The next step is pre-budget organisation