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What Is Budgeting? Why Is It Important?

Budgeting is about managing your money. It basically allows you to work out how much money in total you have to spend and helps you to plan how to spend it! Put simply, it’s about knowing how much money you have coming in and how much you have going out.

How To Budget

There are loads of websites which give guides on how to budget and examples of ways you can lay out your budget.

Moneymoneymoney website gives an example budget chart for you to look at, which is really useful.

*doughuk website is an excellent tool – it gives you the chance to set out what you have to pay for and what you want to pay for to help you prioritise. Then, you can go through simple steps to write up a balance sheet detailing your income (money in) and expenditure (money out).

Managing Money

Managing money can be really difficult, but it is really important so that you don’t end up spending money you don’t have! With so many different ways to pay, it’s very easy to lose track of the amount of money you have in your bank account! It’s really important to keep an eye on both the money you have and what you are spending.

Here are some suggestions for managing your account:

• Always keep your receipts when you spend money.
• Always get a receipt from the cash machine.
• Make a note of all cheques that you write.
• Keep a record of all the Switch or Delta payments you make.
• Watch your standing orders and direct debits.
• Always check your bank statement carefully. Mistakes can be very common.
• Be completely honest with yourself.
• To help plan your spending, write out a weekly, monthly or annual budget plan.