Budgeting is a fairly simple process once you know how. You might have observed your grandmother perform miracles with much less than what you probably earn today. Of course, things were much cheaper back then. But the fact remains that you can develop a talent for saving in a simple and realistic manner. Frankly, there is no need for complicated computer software or electronic notebooks. You can make a success of budgeting with a few good old sensible ideas.
Budgeting requires practice and vigilance along with a firm, methodical approach.
These simple tips will help you understand why your granny was a fantastic financial manager.
- Keep a handy diary or notebook and a pen for writing down your budget. These are great tools to understand where your money is going and where you could pare down your expenses.
- Make a list of your regular expenses for the month. This would include rent, milk, bread, meat, and fruits as well as electricity and water bills. Your grandmother might not have had to content with credit card bills (which explains why they never bought something they could not afford) but you might have to put that one down too.
- Every night, sit down and list out your expenses for the day. This is a small but very important exercise that helps you understand exactly where your money went.
- Hang a calendar where you can see it clearly. Circle dates with a dark marker pen and write down messages. For example, ‘electricity bill due’ or ‘supermarket coupon expires’ etc.
- In the old times, people did most of their marketing on what was called ‘market day’. This helped in keeping grocery expenses under wraps as well as ensured that families got fresh food to eat. Set aside a certain time on a certain day, say 11 am on Saturdays to get your weekly shopping done. Make out your list before hand. Stick to the list when you shop.
- Try assigning different envelopes or jam jars for different expenses. For example, your envelopes or jars could be labelled as ‘milk’, ‘meat’, ‘juice’ or ‘petrol’ etc. Whenever you have an expense looming up, just withdraw the required money from the appropriate envelope. Of course, you need work out your expected budget for the month in order to know how much to put into each envelope.
- Open all your envelopes or jars at the end of the month to see what you have left over as savings.
This is a great way to budget, i do something similar with bank accounts.
one that all our regular set bills come out of and then i transfer into a separate account, petrol and spends and then this is what i can draw out and put into my envelopes. ( i used the old fashioned pension book envelope, sort of wallet type thingy).
In these i have , ‘aldi/sainsburys’, meat, market for veg and petrol.
anything left gets put in the savings.
As we have recently moved house we also have an envelope for ‘home improvements’.
I have a separate ’emergency’ savings account that i transfer £20 a week into automaticly, this is incase the washer breaks down or something equally as important needs replacing.
Its hard sometime to not just spend it all but……. once you see all the savings you have got it feels great!!!