Budgeting isn’t about making your life unpleasant and boring – it’s about helping you to avoid the stress of having too much month left at the end of your money! Finding ways to stop spending unnecessarily can help you have more money for the things that are really worthwhile.

Wants vs needs

Your ‘needs’ include costs like accommodation, utilities, insurance and transport. Food and clothing are necessities, but could you spend less on them? Try switching to cheaper brands, reducing the unnecessary extras and skipping the takeaways. Airtime is another thing that can be cut down on.

And then there are the ‘wants’ like entertainment, alcohol, cigarettes, Lotto tickets etc. – these are things that should only be included in the budget after the ‘needs’.

Examine your spending habits

An important part of budgeting is knowing what you actually spend money on. Track your spending and take a close look at where your money is going. Are there a lot of ‘wants’ that aren’t really ‘needs’? It will be uncomfortable but the ‘wants’ are the first things that need to get cut when money is tight. And don’t forget to include the ‘little things’ – they add up more than you would expect.

Plan ahead

When you know you have a big expense coming up, like a holiday, school fees or a big family event, try to start saving beforehand rather than paying it off later. Allocate an amount in your budget during the months before it happens so that you’ll have some money saved ahead of time.

Even if you don’t have big expenses coming up that you’re aware of, you never know when something might happen that ends up costing a lot and breaking the budget. If you set up a rainy day fund and contribute a bit to it each month then you’ll have some money ready for emergencies.

Pay off debt as fast as possible

The longer you have debt (e.g. overdue store accounts or if you’re paying the minimum amount on your credit card), the more interest you pay in the long run, which is a waste of money that you could be saving!

Prioritise saving

Make saving a priority rather than an option for when you have some money left. Saving is a necessity that’s not just for short-term goals but also for retirement – if you’re still young it might seem like a long way off but the earlier you start saving the better.

Make it a family activity

Your whole family needs to be on board and agree on what’s a good budget. If money is tight then it’s only fair that everyone needs to make a sacrifice. It also helps your budgeting efforts if your children understand the difference between wants and needs – teach them the importance of sticking to the budget.

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