ABOUT LOANS MORTGAGES SAVINGS NEWS Login Join THE IMPORTANCE OF BUDGETING Top tips to help you budget The importance of budgeting An article by StepChange Debt Charity What is a budget? A budget is a list of all the money you receive and all the things you spend money on every month. Budgeting helps you to see where your money is going, so it’s easier to make sure that you’ve covered all of the things you need to pay. It also helps you set financial goals. Whether it’s scribbled in a notepad or put into a spreadsheet, budgeting is an important life skill. Lots of people struggle financially because they don’t plan their spending, or know what their income is. Planning how to use your money may help you: Avoid getting into debt (or help you get out of debt) Plan for big one-off expenses Spot potential money-saving opportunities How to make a budget 1. Get your financial information together You’ll need to gather together all of your financial information including: Your regular household bills (council tax, gas, electricity, phone, internet) Your living costs (food, toiletries, prescriptions, clothing) Any insurance policies you have (home insurance, pet cover) Your travel expenses (car costs, bus fares) Your leisure costs (gym membership, cinema trips) Any debts you have (loans, credit cards) 2. Calculate your income Your income is the money you receive each month from any work you do, as well as from benefits, pensions, investments, or money from partners or relatives. 3. Calculate your regular spending Look at what you spend every month in each of the following categories: Housing costs Household bills and services Travel costs Housekeeping, including food, cleaning, pet costs and clothing Children/family Leisure and entertainment Health and personal care Debt repayments Court payments Other essential living costs Tip: If you’re spending a lot of money every month on debt repayments and are struggling with your day-to-day expenses, you may need free, independent debt advice. Visit StepChange Debt Charity’s website www.stepchange.org for more information. 4. Don’t forget to budget for one-off expenses One of the aims of creating a budget is to plan your spending thoroughly. Do you need to pay for a large one-off expense later in the year such as a car service, or a repair to your home? Make sure you add this to your budget. You can do this by taking the amount you’ll need for the one-off expense, then dividing it by 12 and adding it your monthly budget. You then put this amount aside every month. Putting it in a savings account away from your day-to-day bank account can help you avoid dipping into it. 5. Check if you have a ‘surplus’ or ‘deficit’ budget Once you’ve added together your monthly income, and taken away your outgoings – have you got money left over? If you do, this is called a ‘surplus’. You should use this to pay towards any debts you might have, or add this to a savings account. However, if you’re spending more than your total income each month you have what’s called a ‘deficit’ budget. Spending more than you have coming in means that you’re at risk of getting into financial difficulties, especially if you’re using credit to pay for everyday living costs, or are dipping into your overdraft on a regular basis. You may want to consider revisiting your budget to see if you can cut back in any areas. You should also consider getting free debt advice – using overdrafts and credit cards in this way is a danger sign of debt. 6. Put money aside If your budget allows, you should put money aside each month into a savings account. It’s a good idea to have one for larger, planned one-off purchases, and another for creating an ‘emergency fund’. Having some ‘rainy day’ savings can help you avoid getting into debt if you have an income shock such as redundancy or illness. 7. Track your spending It can be helpful to carry a small diary or use a budgeting app to keep track of your spending. It’s easy to forget small purchases, but they soon add up! Tracking your spending helps you understand where your money goes, but it can also affect how you spend your money too. Writing down every penny you spend may make you less likely to splurge on something you don’t need. Tip: Use cash not card. It’s very easy to lose track of your spending if you’re using your debit card, and especially if you’re using contactless payments. 8. Look for ways to save In almost every budget there may be opportunities to save a little more money. Ask yourself if you could: Move to a cheaper phone/text/data tariff? Switch to a cheaper TV package? Save money on your insurance by comparing deals next time it’s up for renewal? Making these reductions could free up valuable extra money to help you keep on top of your household bills or boost your savings. 9. Review your budget regularly Once you’ve started to budget effectively, you should review your spending regularly. There’s no set time to do this, but it’s worth checking every few months. During your review you should check: Has your income increased or decreased? Are there items you no longer need in your budget? Have any of your costs increased or decreased? Have any of your benefits entitlements changed? Does your budget match what you’re actually spending? Are you on target to build up any savings or pay off any debts? We’re committed to working with members, local organisations, and employers to increase financial awareness in the wider community. For more hints and tips check out our Financial Wellbeing Hub, which includes articles and guides covering everything from budgeting to getting onto the property ladder. If you have any questions or would like help with any of our services, please contact us on 0141 274 9933. OUR SERVICES Loans Mortgages Savings Become a member MEMBERS Login Mobile App News The Big G Lottery INFO Contact us Terms & Conditions Complaints Privacy Notice SEARCH Glasgow Credit Union 95 Morrison St G5 8BE Tel. 0141 274 9933 © Glasgow Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our FRN is 213558 Website by Infinite Eye --> Our use of Cookies We use essential cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences. For more detailed information about the cookies we use please see our privacy policy. (Opens in a new window) External Link Icon Accept All Cookies Accept My Preferences Essential Cookies Essential cookies enable core functionality. Our website cannot function properly without these cookies, and they can only be disabled by changing your browser preferences. Analytics Cookies We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. Analytics Cookies On Off Marketing Cookies We use marketing cookies to help us improve the relevancy of advertising campaigns you receive. Marketing Cookies On Off Cookie Control