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How efficient are you at budgeting?

POSTED: 21st March 2013
IN: Personal Guides
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We can all get a little ambitious with our budgeting, planning to make cutbacks and spending reductions wherever we can.

undefinedIn reality, however, we may find our best laid plans go awry and we need to do more to stay on top of our cash and ensure we do not overspend.

One way to do this is to open up a separate account for our monthly outgoings, which will help ensure we always have enough put aside to pay for essential costs.

Setting up a direct debit from our current account into a separate account will make this an automatic transaction we do not have to worry about forgetting.

Recent research from Think Money highlighted how a number of people are failing to keep track of their cash and often fall short on their budgeting plans.

The survey of 2,000 adults found 23 per cent of respondents did not do anything to ensure they were not spending the money they needed for bills.

It was also discovered 11 per cent of people are not very good at sticking to a budget, while six per cent tend not to budget at all, which could have a serious impact on their household finances.

"Some people are confident in their budgeting skills and perfectly happy to do it all themselves," said Ian Williams, director of communications at Think Money.

"But millions more find it a real burden, whether it's because they're always short of cash, or they just know that budgeting's not their strong point."

The first step to getting those finances in order is to evaluate regularly incomings and outgoings and what is left over when all expenses have been accounted for.

At that point, we can determine how much needs to be put aside for essentials, how much we can invest in a savings account and if we have enough spare cash to treat ourselves at the end of the month. 

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