Help with Budgeting
Keeping a Budget - the basics
What is a budget? A budget is a clear picture of your money. It shows, how much money you have coming in, what you spend it on and what you have left over. We budget so that we can be more in control of our money and make plans for the future. Now more than ever keeping a budget seems to a necessity and by budgeting properly you could end up saving a small fortune. Drawing up a budget is something that's personal to you and your own circumstances. Making a note of what's coming in and what's going out of your account each month is the basic principle of any budget; it's only when you see where your money goes, that you can make changes to curb any unnecessary expenses. That way, you'll not only be saving money but making decisions that could change your finances for the better.
Before you start, here are some useful tips
- Set up a basic budget by taking note of your money that is coming in and going out. Try our handy budget calculator to help you keep track of your finances.
- Remember, be honest with yourself and try to include everything you spend.
- Not sure where your money goes? Print or view your bank statements online to help you identify your income and outgoings. Try keeping a spending diary for a month. You'll be surprised!
- Be aware of your mortgage repayments or rent every month and note the day of the month that the money is withdrawn from your account.
- Remember to include the things you only pay for once a year, such as management company fees or annual car tax and insurance, by estimating and dividing up the average that you'd spend in a year. Don't forget to insert any current debt repayments you may have into your outgoing commitments too.
- Identify areas where you are overspending, ask yourself if it is absolutely essential? Could you make reductions such as switching utility services to a cheaper provider or change your grocery retailer to a more competitive one?
- Check your bank balance frequently online, on the phone or at an ATM
How do you make a budget?
You can make a budget weekly or monthly. First off, you need to work out your income for the week/month by adding together all the money coming in, like your wages, social welfare or any benefits you might have. Then you make a list of all of your expenditure. So from ths essentials such as mortgage repayments, electricity and food to the slightly less important items like travel, clothing, and a social life. Don't forget to include any money you owe, like a car loan or other bills. Go through everything on your list and put the amount you will need every week to pay for each item. For example, if your ESB bill is usually around 80 euro every two months, which is roughly 8 weeks, then we should allow 10 euro every week for electricity. And finally you take away the amount you will need every week from your weekly income figure. The money that is left over is called your disposable income. This is money you can save, or use as you wish, maybe to help to pay for things like a holiday or a special occasion. You can find free budget calculators online on sites such as www.makingcents.ie, www.nca.ie and www.mabs.ie.
Good budgeting habits and managing the day-to-day
Day-to-day management means knowing when you have money, when you need to pay things off and when you need to be more careful. Being good with your money doesn't mean thinking about it every minute of the day; it just requires good habits at key times of the month or week.
To budget effectively, remember to review your budget regularly, especially if there are any changes to your circumstances to make sure that you're living within your means. Try a few of these helpful pointers.
- Try to save part of any pay rises or bonuses.
- Be realistic. Know your weak spots and allow for a little unplanned spending now and again. Why not set up a standing order direct to your savings account?
- If you don't have a savings account, open one up today and transfer any spare money you have at the end of the month into it and try to set up a regular standing order.
- Avoid impulse buying! Plan your expenditure in advance and try not to over-purchase.
- Set up Direct Debit payments, so you can pay your bills on time and when you know you have money to pay them with. Try to move standing orders and Direct Debits until just after payday to avoid surprises at the end of the month.
- See if spreading your larger payments over the year rather than paying a lump sum by Direct Debit might suit you better.
- Apply for an overdraft in advance if you think you might go overdrawn, but try not to get used to having an overdraft, use it only as a temporary arrangement.
The key to managing the day to day spending is to focus on your budget and make reductions were necessary.
Here are some additional money saving tips:
- An Post household budget – the easy pay option. Household Budget allows people who receive certain social welfare payments to pay a regular amount towards various household bills by direct deduction of their payments. The service is operated on behalf of the Minister for Social Protection by An Post. Go to your local An Post office to pick up a form, go to www.anpost.ie or call 1800 70 71 72 for further information.
- Shop around the supermarkets – look at the weekly deals the various supermarkets have on offer. You may get your meat from one and your veg from another. Don't be a brand slave. And don't forget the discount supermarkets. Use your reward/loyalty cards. Have a look at the supermarket special offers on www.thriftypages.ie.
- www.cheapeats.ie is a blog about eating well in Ireland whilst getting value for money.
- Compare prices online, you may find yourself a bargain. For example, many shops now sell through Ebay which could net you a discount on what you may pay instore.
- Bring a packed lunch to work, you could save € 1128 a year (based on a conservative €4.70 per day, 5 days a week, 20 days per month over 12 months).
- Price comparison websites: Callcosts.ie – mobile phone price comparisons, Myvoipprovider.com – home phone price comparisons, http://www.hia.ie/ci/health-insurance-comparison - health insurance comparison site, pumps.ie – compare petrol prices
- Carry out a home energy audit. The Sustainable Energy Authority of Ireland (SEAI) offers a user-friendly, step-by-step home energy survey online so that you are more energy aware. SEAI can also point you in the direction of energy experts who can carry out a professional home energy audit.
- Try ESB Electric Ireland's appliance calculator to find out how much your appliances cost to run https://www.electricireland.ie/ei/residential-energy-services/reduce-your-costs/web-calculator.jsp