Making a budget doesn’t have to be hard work. Discover how to create a family budget in less time than it takes to watch an episode of Corrie!
There’s no doubt about it – making a family budget WILL save you money (and probably help you sleep better at night, too).
Now, we know that in most people’s minds making a family budget is about as much fun as root canal surgery – but it needn’t to be a chore. We’ll show you how to stop your money worries in less than 30 minutes.
Everyone knows how much they earn – but do you know how much you spend?
Don’t worry – it doesn’t have to mean a boring long list or fiddly spreadsheet – simply use this free online family budget planner and you’ll be on top of your finances in no time.
Why make a family budget?
It will save you money
Once you see exactly where your money goes each month, you can see exactly where money is being wasted, and how much money you could save. Whether you want to put more cash aside for savings, a holiday or a new car – making a budget can help you reach your goal quicker.
It will save you time
You’ll know instantly what you can and can’t afford without having to sit down and work it out each time. It also makes life a lot easier when it comes to filling in forms for the taxman or other creditors.
It will save you stress
Making a budget puts you in charge again – it lets you control your money, rather than the other way around. There’s nothing more stressful than not being sure whether you’ll have enough cash to last until the end of the month. By making a budget, you can banish that stress.
Before you get started with your free online family budget planner, follow these steps to ensure you get the most out of your budget!
Make a note of what you really spend
Seems obvious, this, but most family budgets don’t reflect what they really spend. Many people end up making one of the following simple mistakes when budgeting:
- Not listing everything they spend money on (that includes things like your daily coffee or newspaper)
- Not taking into account ‘big ticket’ items such as holidays and your Christmas spend. If you don’t plan for these in your budget, you’ll find yourself struggling to keep on top of your money every time summer and December rolls around.
Try keeping a spending diary – it really works
Going through your old bank statements is an excellent way to see how much you spend, and what you spend it on. If you still find it a struggle to work out how much you really spend day-to-day, try keeping a spending diary.
This just involves carrying a small notebook with you everywhere you go and making a note of absolutely everything you buy. Do this for a month and you’ll get a real insight into how much you spend when you spend, and what you buy. It’s a simple but very effective tool.
Do you spend more than you earn?
Once you’ve worked out how much you’re spending each month, ask yourself whether you are spending more than you earn.
If the answer’s no – give yourself a smug pat on the back.
If the answer’s yes – it’s time to cut back.
How to cut back on spending without reducing your quality of life
First off, there are ways to cut back on your spending without affecting your quality of life. In fact, even if you’re earning more than you spend you should still try the following:
- Make sure you’re getting help with your childcare costs.
- Consider remortgaging. If you have a mortgage it’s likely to be your biggest monthly cost, so make sure you’re on the best possible deal. Talk to an independent financial adviser about your options (remember to take into account transfer charges and legal fees before switching). Find out more about remortgaging.
- You could save £100s a year by switching your phone, broadband, gas and electricity providers. Switching isn’t as hard as you think – have a look at our guide to switching.
- The same goes for switching insurance – especially car and home insurance. Loyalty doesn’t pay in this sector, so shop around for cheaper quotes (use comparison sites to speed the process up) and save yourself a packet.
Use cashback sites to save on insurance
Top Tip: Save yourself even more by getting your insurance policy through a cashback website (right now you can get up to £80 cashback by purchasing car insurance from the likes of Aviva, MORE TH>N and M&S through Topcashback, for example. And up to £60 cashback by getting your home insurance through them, too.
Make a bit of extra cash on the side
If you find yourself just falling short of your budget by a little each month, there are plenty of ways you can earn a bit of easy extra cash in your spare time. Take a look at our top 14 ways to make money from home and 17 ways to make money online fast for ideas on how to become a money-making maestro!
Ebay is possibly the easiest way you can make money from home, plus you get that satisfaction of selling old items that had been taking up precious room in your attic or cupboard. Check out our top 10 tips to help you sell anything!
Still in the red? Try these additional methods to save money
If after doing the above you’re still spending more than you earn, there are other ways you can cut back on your spending.
Look at the family budget planner you made, and see where your money is going each month. Are there any luxuries you can cut back on? Most people are surprised at how much they spend on little luxuries such as coffee, magazines, cigarettes, and chocolate. (Did you know, for example, that a third of Brits spend over £2,000 a year just on lunchtime snacks and sandwiches?)
If you still need to save money after cutting out the little luxuries, consider what larger sacrifices you could make. Perhaps not going away on holiday this year, for example (or maybe having a cheaper home break or staying with relatives instead).
Food is another big cost. MySupermarket is worth checking out as it can save you about £20-30 a month off your food bill.
Manage your money with separate accounts
Making a family budget is easy – the hard part is sticking to it! One tried and trusted method to help keep you spending within your means is to set up separate accounts for your main spending priorities.
You can tailor this to whatever suits your individual lifestyle. You could set up one account for food, one for bills, one for holidays, one for Christmas, one for emergencies, and so on. Then you just set up standing orders to shift money from your main account into each of these accounts each month. Then you know whatever money is left in your main account is what you have spare that month – and you know that you are only spending what you can afford.
Are you doing all of the above but still getting into debt?
Even after making a family budget you’re still worried that you’re sliding into debt, make sure you read our 10 step guide on how to get out of debt.
If you’re struggling with debt, make sure you seek outside help
However if you have serious debts that you are struggling to manage on your own, make sure you seek outside help. There are plenty of excellent free debt advice services available (such as the Citizen’s Advice Bureau and the National Debtline).
They can help you manage your debts and negotiate with creditors. But don’t ever pay for debt management advice – there are many excellent free debt advice organisations. (For a full list see the end of our guide to getting out of debt.)