Hi, budgeteers! Here’s a new post about budgeting: ‘Easy budgeting for overwhelmed or lazy people’! Does that sound like something you could use?
I’ve already written one in-depth post about budgeting, but it was quite detailed and gave lots of options.
The thing is, I’m still getting people telling me they need advice on budgeting.
I’ve been thinking about it. Many people are either too busy, overwhelmed, or lazy to make a detailed budget. Also, not everyone enjoys it as I do! P.S. The laziness comment isn’t a judgement. I could win an award for laziness many days of the week!
This isn’t the way we budget our money, but it could work for lots of people who want something simple.
So, how it works…
Easy Budgeting for Overwhelmed or Lazy People in 5 Simple Steps
Now, you might be working on a monthly basis, or you may prefer to budget weekly. Whatever you decide, alter what I’ve outlined to suit YOUR needs.
1) Work out how much your income is each month.
2) Write down all the bills you HAVE to pay. For example:
- council tax
- loan /credit card repayments, etc
or those bills you’ve chosen to commit to, such as:
- TV subscription
- gym membership
- children’s’ clubs and activities, and so on.
Will you cancel anything?
This is a good time to decide if you want to cancel any of these things (if you can) and trim down your outgoing expenses.
Subtract this money from your income.
When you’re planning your budget, don’t forget those bills that you might pay once a year. Things like annual car insurance payments or boiler servicing.
Will you treat these like monthly bills and ‘pay yourself’ a regular amount to put by for when the bill arrives?
Example: Your car insurance is £300 a year and you pay it in September.
- £300 divided by 12 months is £25 a month.
- You save £25 a month so when September rolls around – boom! – you’ve got the money to pay the bill outright without taking a massive chunk of your income that month.
Put these types of savings into a savings account, or at least separate current account so you don’t spend it.
Staying with the scenario that an annual car insurance bill of around £300 is due this September. You’re only now deciding to save for it this way. Now you have two choices:
i) Divide £300 by the number of months you have left before the bill is due. That’s what you have to put by each month.
ii) Continue to save £25 a month, knowing that when September arrives, you’ll have to make up the difference from September’s income.
Does that make sense? Please say if not!
What are you really spending?
3) Decide how much is a realistic amount needed for food, other groceries, and transport (fuel, buses, etc).
Looking back at what you’ve been spending in the past helps. Do you have the evidence in the form of receipts, bank statements, etc?
Subtract this money from your income, also.
4) Identify what your most important financial goal is right now. It might be:
- building an emergency fund
- paying off debt
- saving for a deposit for a flat
- investing for retirement
Now decide what is a realistic amount of money you’re committed to saving each month to move you towards your goal. Automate these savings.
You’ve covered your main bills and you’ve decided what is a realistic amount to save or pay off debts. Now there’s no reason not to set up a regular bank transfer each month. Out of sight, out of mind, my friend.
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Also, subtract this money from your income and you’ll have an amount left (assuming your outgoings aren’t greater than your income).
The fun part
5) Spend the rest on whatever you want/need.
In steps 2-4 you dealt with all your bills, essentials, savings or debt-repayment goals. You now don’t need to track or record your spending!
Once it’s gone, it’s gone, but you’ll know you’ve covered the necessities of life and THAT is a great feeling.
This is a simple way you can budget. If I can ever work out an even simpler way, I’ll get back to you!
I hope this post has been helpful for those of you that don’t want to track every penny in and every penny out or break everything down into smaller spending categories (unlike people like me, who are money nerds and enjoy it!).
Let me know what you think. Is this something you could work with? Are you going to give it a try? Please report back and tell me how it went!
If you think anybody else would find this useful, please share (I’ve made it so easy for you to do). The aim of this blog is to reach and help as many people as possible with their money-management.
I love hearing from you and want to grow a community of people interested in improving their finances and simplifying their lives. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.