If you’ve decided to keep a watchful eye on your finances, or your financial circumstances have changed, it’s a good idea to learn to budget. If you’re new to budgeting, follow these simple tips to keep track of money matters and manage saving and spending.

Where to start

Budgeting is all about balancing your income with your outgoings. In order to do this successfully, it’s essential to monitor your bank account and work out how much is coming in and how much you’re spending. Most people draw up a monthly budget, as they get paid a monthly salary. You can alter the time frame to suit your individual arrangements. If you get paid weekly, for example, you may prefer to draw up a budget for each week.

Start budgeting by writing down your monthly income. Include any money you receive from work or the state. If you receive income support benefits or disability tax credit, for example, include these in your total income.

The next stage is to note down everything that goes out of your account every month. Include all your bills and regular payments, such as a train or bus pass. Go through your statements and check all your direct debits. You can use the old-fashioned method and stick to pen and paper, or use a more advanced spreadsheet. If you’re confident with computers, it’s wise to use spreadsheets, as you can update and alter them quickly and easily.

Once you’ve recorded all your regular payments, add any additional costs for the month ahead. Have you got birthday presents to buy, or a night out planned, for example? Are you due a dental check or does your health insurance need renewing? Add up the total expected outgoings and compare it to your income.

Spending and saving

Once you have a monthly budget in place, you can adjust your saving and spending. If you’re left with little margin for error when it comes to balancing the books, try and cut costs down for the month ahead. If you’ve got a little extra, try and set some aside.

Check your bank balance on a regular basis. Even if you think you know exactly what is coming in and going out, you can often forget about things you’ve bought or payments you’ve made. In a short space of time, you can lose track of your spending, and this will throw your budget off kilter. The easiest and fastest way to keep track of your finances is online banking. If you don’t already have Internet banking, contact your local branch and ask an adviser to set it up for you. You can check your balance, see your statements and make payments whenever and wherever you want.

Tackling financial problems

If you have debts, it’s always beneficial to seek advice. Often, there may be simple solutions. Tackling problems may be daunting, but it’s much better to act quickly, rather than letting issues spiral out of control.

Making a budget is relatively easy, especially once you get the hang of it. Keeping track of your spending can help to ensure that you steer clear of debts and improve your chances of saving successfully.

Budget table source: D235 – Selbst erstellt mit OpenOffice.org 2, original upload at http://de.wikipedia.org/wiki/Bild:Spreadsheet.png, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=2723959