It’s never too late to start practising this key skill.
Budgeting is the foundation of financial literacy and the touchstone of success with cash. At its most basic, it’s simply the balancing of your income and your expenditure, ensuring that you don’t spend more than you earn and that you have cash for other things. Unfortunately, most of us are pretty bad at budgeting. It’s not something we’re ever really taught and it’s all too easy to get into trouble with your money before you’ve ever had the chance to appreciate what works and what doesn’t. However, it’s also never too late to learn those key budgeting lessons according to the experts at the Solution Loans Personal Finance Blog:
- You can start right now
Download a budgeting app or pick up a pen and paper and start doing your sums. If you’re not currently budgeting then now is exactly the right time to make a start.
- It’s never to late to learn how to budget
You’ll always be able to make a positive difference to your finances, whatever state they are in, by starting to budget. So, even if you’re in a complete mess, it’s still not too late to benefit from starting to budget right now.
- You need to budget regularly to benefit
Successful budgeting means staying on top of your income and spending (read more about that here) as it ebbs and flows. So, you need to decide how regularly you want to budget – weekly or monthly works best for most people. Once you’ve made the decision about when to budget then stick to it religiously if you want the best results.
- Successful budgeting takes some discipline
It’s all very well doing the sums on paper about how to make your finances work for you but you’ll also need to have the financial discipline to put this into practice. For example, if your budget requires you to halve your spend on weekday lunches by taking leftovers or home made sandwiches it’s going to take a little self-control to ensure you don’t give in after a day and start buying food at work.
- Better budgeting is a lifestyle not a quick fix
You’ll see some positive benefit from switching to a better approach to budgeting straight away but you won’t reach those bigger financial goals immediately. It’s always worth remembering that budgeting is a total lifestyle change, not a way to instantly correct bad habits and finances – it might take a little while for the serious benefits to kick in and you’ll need to hang in there until they do.
- Learning to prioritise your spending is key to good budgeting
What do you have to spend your money on, what is important to spend money on for the future and what do you just enjoy spending money on? Good budgeting will involve being able to distinguish between all of these and prioritise the most important.
- If you’re not great at budgeting now, you can get better
Practice often makes perfect when it comes to budgeting – the more you are able to budget, the better you will be. Plus, there are plenty of tools to help you get it right, from personal finance artificial intelligence through to smart budgeting apps.