Budgeting is the act of creating a financial plan to suit you and your finances. It is often over a fixed period of time, whether this is half a year or a whole year. Creating a budget allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do.
Why are budgets important?
A budget will enable you to see how much money you can spend over a certain period of time. Usually, people make a budget every month for a year, meaning that they are able to break down the month. This lets them understand how they can use their money without causing stress or havoc to their income. The last thing anyone wants is to be living paycheck to paycheck, so this is why it is important to be able to exactly see and plan the month ahead.
Can anyone budget?
The simple answer is yes! Even whilst living on minimum wage, it is possible to be able to budget each month. You just need to find the perfect budgeting challenging to suit you and your income. For example, someone who earns triple digits will have a different budget to someone who earns less or more. It is entirely down to personal income and how much you spend on essentials in day to day life.
What are some of the most common budget plans?
The most common plan that people tend to believe works the best is the 50/30/20 rule. This is where 50% of your income is spent on the essentials like food and bills, 30% of your income goes on things you want. This could be things like clothing and eating out. Lastly, the remaining 20% should be saved, whether that be in a savings account or in a way that suits you. This has been proven to work for hundreds of thousands of people around the globe, but that doesn’t mean it will work for you, so here is another common plan.
Why not try an online budgeting plan? There are plenty of websites which will work out a plan for you for free if you enter all of the necessary information. Whilst you’re imputing all of your information, you will be able to see how much you exactly spend and where your money goes. In today’s society with technology advances and changes, it is so easy to spend money in a matter of seconds and then forget what you’ve bought in a weeks time. So, it will not only help with finding the perfect budget. But, it will also help you understand your spending patterns.
Is it bad if I don’t use a budget?
If you don’t use one and you are in a great financial position with no worries, then it might not be essential to you. But, that doesn’t mean you shouldn’t use one. We personally believe that everyone would benefit from a plan. Everyone should know how to manage their finances and exactly what they spend money on.
What can I do if I need money but don’t have enough?
If you are faced with an emergency but have no savings, one of the few options available is a loan. A personal loan is there to help you afford a large purchase or pay for an unexpected bill quickly. Thankfully, with BingoLoans, you can borrow up to £35,000 for up to 6 years. This enables people to afford exactly what they need whilst giving them a stress-free repayment period.