Never let anybody tell you that budgets are evil! When it comes to establishing a thorough savings plan, a budget can be your closest ally towards achieving your end goal.
Let me dispel a few of those budgeting myths that always seem to rear their head when it comes to talking of savings:
Budgets Do Not Have to Be All Singing and All Dancing Creations
You do not need an intricate budget with numerous categories and PowerPoint presentations added as standard! A budget needs to work for you, to enable you to see where you can make those savings and therefore it should appeal to you to want to use it on a regular basis.
You may want to keep your budget on a spreadsheet, or you may prefer the idea of having it to hand in a notebook, so you can take it out and about with you. What I’m trying to say is that you do not have to impress anybody with your budget skills or presentation, it is purely for your eyes only. If it reflects your financial situation, it will do the job!
Budgets Can Be Flexible to Reflect Life Changes
Some people feel as though once they have created a budget, it is cast in stone and cannot be changed. However, that’s not how life works, and a budget should be designed to reflect such unpredicted changes – otherwise, it is an unfair representation of your financial situation.
A budget needs to consider possibilities, such as unexpected charges, because these can eat into your finances considerably if you haven’t planned for them ahead of time. Also, budgets need to offer some flexibility allowing you to take money from one category and place it in another as and when you need to.
Track your spending patterns over a couple of weeks or months to see how achievable your estimates are, and then update your budget to match.