Personal budgeting: more important than ever in the 2020s.

The year of 2020 has seen a lot of turmoil across the globe so far – causing a lot of people stress, panic and anxiety for what the future holds. When it comes to finances, you may have lost work, took a slump on investments or simply not have enough money coming through the door. It is for this reason that you should focus on creating a real, working and sustainable household budget plan that works in your best interests and sees your money work harder for you.

If your country is currently experiencing lockdown due to coronavirus – then what better time to start? If you have free time, you can dedicate this to creating a spreadsheet and working out your budget so that when life resumes as normal, which it will, you can really use this budget plan to your advantage. Here, we mention some useful tips to getting your budget plan off to the best start:

Find a template – Some people like to create their own spreadsheets but if you aren’t very tech savvy, or you just don’t know where to start, then use a budget template online as a guide. You can download these for free and they are easy to use, simply slot in your information to personalise it. A great example is Wonga’s monthly budget template (you can view it here) which includes the following sections: monthly housing budget, monthly food budget, monthly transportation budget, monthly personal care budget, monthly pet-care budget, monthly insurance budget, monthly budget for taxes, monthly for existing loan payments, monthly legal payments, monthly budget for gifts and donations, monthly budget for savings and investments and your monthly entertainment budget. This is just a typical schedule and there are others on the internet which may suit you better, just do a simple Google search.

Don’t guess figures – The next thing you should do is get out all your utility bills, loan repayments, pay slips, tax reports and so on, so that you can put exact figures into the budget template. You should be as accurate as possible so that you get the clearest picture of your finances. Also remember any additional income you may have. If this is a family budget planner, remember your partner’s income and expenses too.

Don’t be alarmed at what you see – You may find it difficult to see that some of your spending is excessive or that you have overpaid in some areas. Don’t gloss over that – now is the time to address it and figure out why you are spending so much on that one thing. For instance, you may find that you spend a considerable amount – maybe more than what you thought you did – on diesel or petrol for your vehicle. This could make you re-evaluate how you travel, and you may therefore consider walking to the shop more, or even getting public transport. Remember these are positive steps, and no one is perfect!

Create goalsThe Balance talks about making future goals for your money. If you are struggling to make ends meet each month, then saving money may feel like the last thing you can do, but creating these goals really can help you with future planning and aspirations. They say, “Whether you want to save money for your child’s college fund or you’d like to tuck money away for your retirement, setting financial goals is an important step in protecting your family’s future.”

Implement it into your life – It is no good doing a budget plan but then not adhering to it. When life gets back to normal, you should ensure that you use it. Share it with all members of the household so everyone knows the picture. If you have highlighted extra money for saving, then create a direct debit where this money can be transferred every month automatically. You are much more likely to save money if you do this simple step! Check back on your budget plan regularly to make sure you are still on track, or to adjust costs if utility bills change over time.