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Guide to Creating The Budget to Meet Your Savings Goal in 2019

Guide to Creating The Budget to Meet Your Savings Goal in 2019

Guide to Creating The Budget to Meet Your Savings Goal in 2019

Nearly 40% of adults aren't in control of their finances.

Adults in the UK struggle to save money. In fact, 40% of adults have less than 500 pounds in their savings accounts.

This leads to a culture of living paycheck to paycheck, stress, and debt. While income levels may contribute to some of this culture, lack of personal finance education is likely the main culprit. Quite simply, we weren't taught how to budget, save, and manage our credit.

The human need for instant gratification also contributes to financial struggles. In a debt society where we can get what we want now without the amount of money to pay in full satisfies this tendency. It isn't our fault that we weren't taught these necessary skills in school, but it is our responsibility to learn about personal finance in the present.

So, bravo to you for making it to this step! Personal finance can bring up a lot of mixed emotions and resistance, but budgeting your money is always a simple place to start. Budgeting helps you to track incoming and outgoing money flow and to expand your savings accounts so that you can live the life you dream of.

Budgeting takes hard work and a commitment to make some changes, but it will bring you so much confidence and happiness in the long run.

Ready to start budgeting and make 2019 a spectacular year of saving?

Read on to learn how to create the budget to meet your savings goals for 2019.

How To Create The Budget to Meet Your Savings Goals for 2019

Budgeting and saving money can seem daunting at first. But, learning as you go and having a strategy for success can put your mind at ease. Explore the following tips and strategies to achieve your savings goals in 2019.

1. Goal Setting

The first step in starting a budget is to set some goals. Setting short and long-term goals can help to keep you on track and in good financial standing.

When setting goals, consider what is truly important to you. What are you saving for? Common things people save money for the long-term are retirement, a new vehicle, or a home.

Other things people save for are travelling, college for kids, or a new TV.

Attempt to balance practical savings goals with leisurely savings goals. To do this, think about your life long-term and your needs versus your wants. For example, if you plan on retiring, then you need to save money in order to do so.

A new TV, on the other hand, is not a long-term need, but rather a want. Try to balance needs and wants by prioritizing your needs first and foremost.

It's important to enjoy your life and your money, but it's also important to provide yourself with security and peace of mind. Planning ahead by budgeting and keeping your goals in mind can help you to achieve balance.

2. Looking at the Numbers

Looking at your finances can seem overwhelming at first. This may be the first time that you are willing and ready to look at them, and that's okay. Be patient and kind to yourself and know that you're not alone.

Two categories to look at are incoming and outgoing money. Income includes all the money you made or provided with each month. Outgoing money is the money you spent in one month.

Start by only looking at the last month of expenses and income. Since bills are normally paid monthly, this will better help you to understand how to budget for expenses and save the rest.

Add up all of your income and subtract all the money you spent in one month. Calculate how much money, if any, you may have leftover.

3. Creating a Baseline

Compile a list of the living expenses you need to survive. These include rent or a mortgage payment, a car payment, groceries, and utilities. Debt payments can also be included in this category.

Add up all of your living expenses to create a baseline for your budget. Your living expenses should add up to roughly 55% of your total income. It's recommended that your rent or mortgage equate to 1/3 of your income.

If your expenses exceed 55% consider if it's possible to downsize to free up your finances in some way.

For example, are you able to move to a cheaper apartment? Could consider getting a roommate?

Can you lower your car payments by purchasing a cheaper vehicle? Can you save money on your utility bills by becoming more energy conscious? Can you shop at a less expensive grocery store or use coupons to lower the cost?

Many utility companies also offer budget billing which allows you to pay the same amount each month. This can make your expenses much more predictable making it easier to balance your budget each month.

Changes in living expenses can be tough to make. Consider all changes to your living expenses thoroughly. If you don't or can't make any changes to your living expenses, consider getting a higher paying job or earning a side income.

4. Eliminating Fluff Expenses

Fluff expenses are the money we spend on items we don't truly need or want. We may spend this money on-the-go, because we feel obligated, or mindlessly.

Look at your bank statement for the last month. Aside from living expenses, highlight the items you spent money on which truly made you happy.

Again it's important to enjoy your life and money helps you do that. By looking at the items you spent your money on which truly made you happy, you can get a better idea of money you can free up and save.

Ask yourself, did it truly make my life better and happier to buy that ice cream? And be prepared for the answer to be yes! If items didn't improve your life or make you happy, then consider eliminating them from your spending.

How we spend our money reflects how we live our lives. If you don't love going out to dinner with your neighbours, then kindly decline their next invitation or have them over for a game night.

5. Making Room for Savings

Once adjustments are made to your living expenses and fluff expenses are removed, it's time to create a solid budgeting plan.

As stated previously, 55% of your budget will go toward living expenses.

20% of your income should go towards savings. It's always a good idea to first save money towards an emergency fund which is also a need. Focus on saving $1,000 for an emergency fund before you save for "want items".

While saving for your emergency fund you can split the 20% so that you can save for the emergency fund while also beginning to save for long-term needs such as retirement. Aim to save 5 to 10% of your income towards retirement at all times.

If an unexpected expense comes up, then use the money from your emergency fund to pay for the expense. Then replenish the emergency fund using the same strategy as before.

Once you saved your emergency fund, it's time to start saving for the fun stuff and the items that will make your life easier!

The remaining 25% of your budget can be used for monthly wants or be saved for long-term wants such as a TV. You can also break down this percentage to do both allowing for fun each month and savings towards things you want.

For example, say 25% of your budget where your income is 1,500 pounds per month equals 375 pounds. You can decide to save 175 pounds for a want such as travelling and then spend the rest on things you enjoy doing each money like family ice cream nights!

6. Checking Your Budget Monthly

Check in with your budget monthly. See how your budget is improving and where you are willing and able to make more improvements.

Budgeting websites such as Mint can help you to store your monthly budgets in one easy-to-access location. This makes it easier to compare your current budget balance with the previous one. Websites like Mint can also do the balancing math for you!

Ready to Create The Budget That Will Help You to Save Money in 2019?

Creating the budget to meet your needs can seem at first like a challenging endeavor. With practice, determination, and knowledge you can turn your finances around.

Money is the energy of our lives. The money we make is the money we spent hours working for. When we think about how we want to spend our energy, it helps to guide how we spend our money.

We can't expect to be perfect or to not slip up. But, if we keep budgeting and personal finance at the forefront of our minds, we can start to live the lives we truly desire.

If you want to save more money by using coupons, then sign up for our services! We provide you with great shopping deals all in one place to save you hundreds of pounds per year!

Contact us today to learn more and save more!