Personal finance

Methods to Create a Budget

budgetingThere are many reasons why someone may not have implemented a budget to their finances. Some feel they haven't got the time, some feel they haven't got the knowledge whereas others simply don't know where to start. The first thing to decide is where you're going to record your budget.

There are various options available these days, each with their own advantages and disadvantages. One thing to bear in mind is that you must be able to access your budget at all times in order to track spending on-the-go; here are some of the possible options:

  • On paper: A more traditional method of budgeting would be to buy a notepad and manually create your budget using pen and paper. The great thing about this is that it's no hardship to carry around a notepad, however making multiple alterations may cause your budget to look scruffy and unorganized
  • On an Excel Spreadsheet: A more modernised approach which involves using Microsoft Excel (or an alternative spread sheet software) to create your budget. Making alterations is very simple and due to the handy formulas available - you don't have to do any of the maths. The only downside is that in order to access it on the go, you'll need your laptop/ tablet at hand which may not always be possible.
  • On a Smartphone App: There are now a number of budgeting apps available for you to download onto your Smartphone or tablet device. These apps will have all income and expenses preloaded meaning all you have to do is fill in the figures.The majority of us have our phone on us at all times meaning accessibility should never be a problem.
  • Using an online budget planner: There are a number of websites around these days that offer free budget planners. Much like smartphone apps these have almost every possible outgoing listed which means you simply have to fill in the ones that are relevant to you and ignore the rest. These are extremely comprehensive however accessing them on the go may be a problem as you'll need both your laptop and a stable internet connection.

As you can see each of these methods have their own positives and negatives, choosing the best options for you will be dependent on a number of external factors such as your work commitments, family commitments and access to resources.

In order to get the best of both worlds (accessible and comprehensive) you could use the framework provided by an online budget planner and note it down on an Excel Spreadsheet or in a notepad.

By ensuring that you have a solid weekly or monthly budget at hand that is regularly updated and refreshed will be a great tool to have during these tough economic times. Not only does it provide you with a framework for spending but it enables you to highlight areas in which you could potentially reduce your outgoings and increase your disposable income. Having some ambitious financial goals should also provide you with the motivation you need to succeed.

If you have any questions, please ask below!