Everyone manages money differently – whether you’ve got all of your spending planned out at the start of the month or you’re always waiting for the next payday to afford your bills. There’s not a necessarily right or wrong way to manage your spending but something that could definitely help you out is a comprehensive budget.
Budgeting helps you stay in control of your money by making sure you know how much you’ve got coming in and what you’re spending it on. However, depending on your spending style, you might be better off doing this in a slightly different way. Let’s find out the best way to budget for you.
If you feel like a millionaire every payday, you might feel more tempted to go out on a shopping spree. You might feel like money just burns a hole in your pocket and you’re happy to treat yourself to something you want.
There’s nothing wrong with spending money when you’ve got it but if you don’t leave enough to get through the rest of the month, you could find that you start to struggle. It’s important that you make sure you’ve set aside enough to cover all of your bills and financial commitments first, so you know you’ve not forgotten anything. Put together a budget with our definitive guide to budgeting and work out your disposable income. Once you know you’ve covered all of the important things, you can feel free to spend what’s left on whatever you want.
Saving it up
Do you find it difficult to spend money on yourself and instead prefer to save it up? You might be more likely to stay away from spending if you’ve had problems managing money in the past. It’s good to be sensible with money and make sure all of your bills are paid, but it’s also important to get a spending balance too.
Instead of hoarding your money away with no end in sight, identify what you’re working towards saving up for. Are you looking to treat your family to a holiday or do you want to put down a deposit on a house? It’s also worth thinking about the account you’re saving your money in. If you just keep all of your money in your personal account, you might be able to get a better return by opening a savings account as well.
Having a balance between spending and saving is a sensible way to way to stay in control of your money – you make sure all of the important things are covered but you don’t deny yourself a treat if you know you can afford it. If you’re in this position, you could benefit from saving up an emergency fund so you’ll be covered in the event of any unexpected bills.
Try to save up at least a couple of hundred pounds so if you need any emergency repairs on your car, it won’t throw your regular budget off balance. If your budget is really tight, it could take just one extra expense to push you off budget and leave you struggling to catch up.
No matter how you manage your money, if you’re looking for help with your budgeting, you might want to consider the thinkmoney Personal Account. Whenever you get money paid into the account, everything that’s needed to cover any bills you’ve told us about will be kept aside. The remainder will go onto your card, so you’ll be able to spend without worrying you’ve forgotten something important.
The thinkmoney Personal Account has a monthly management fee of £17.50 or £24.50 for a joint account – you can get more information about the account here.