This is in no way financial advice. But budgeting is one of the best managing your money.
There are different methods of budgeting but it all comes down to the main aim of managing your money. By looking at your income and taking away your expenses then seeing what is left. Please have a look at my other two posts on budgeting
A budget is a plan for what you do with your money and how you spend it.
50/30/20 budgeting
The 50/30/20 budgeting method is a method I use and find it useful to break down my spending. In this budgeting method you separate the income that you get in to 50% essential spending, 30% you spend on yourself and 20% you put into savings.
| Say you earned £2500 | |||
| 50% is £1250 | Spending on essentials | ||
| 30% is £750 | Spending on yourself | ||
| 20% is £500 | puting money into savings (top saving accounts) |
You can also adjust this to suit your priorities for example. If you want to save for something big, you can put 30% towards your savings instead of 20%.
It is important to have an emergency fund Incase you was to lose your job or to lose your benefits. So the emergency fund could be be 50% towards your essential spending, 30% towards yourself, 10% on savings and 10% on your emergency fund.
Or if you was to have any funds left over after the month. You could put that in to your emergency fund or move it forward and put it in to your next months budget.
Zero baset budgeting
Another method is the zero based budget. This is where you create a budget where every pound has a perpers. In other words once you have created your budget, there is no money left because all your money is accounted for in your budget.
After you have created your budget and accounted for your essentials eg food, rent/morgege, energy. Your savings and your emergency fund. After according for all this, you will spend/distribute your remaining money through out the budget.