Creating a Personal Budget

Picture of a notebook, calculator and pencil
Picture of a notebook, calculator and pencil
Photo by Nataliya Vaitkevich from Pexels

Why is creating a budget important?

Treat your finances as though you are running your own business. The budget is the most vital aspect of a business. It is what keeps the company going. It allows you to have a goal and achieve it without having too much stress or worry. Creating a budget is one of the most important things that you can do for yourself.

Do not let money worries control you, take charge and be in control of your money and avoid getting into debt. Debt adds more problems to peoples lives which is not worth wasting time worrying about it. Budgeting is just another form of planning. Planning your life and ensuring you stay financially stable to do the things you would like to do.

How to create a budget

For me, budgeting is a bit of a chore but a must if you want to be financially stable. Creating a budget is essential to track your spending and find out where you are spending your money. You can then decide where you can stop your unnecessary expenditures.

List Out All Your Monthly Expenses

Make a list of all the items you need to buy regularly and your essential bills. You can divide them up by

Fixed costs include the price of fixed bills you may have or expenditures where the price does not change. 

Variable costs can change – For example, you may have set your utility bills on a variable tariff where prices can either go up or down depending on the market prices.

Semi-variable costs – for example, this could be your mobile phone charges. Mobile phone charges can fluctuate depending on the calls you make month-by-month.

-Rent or mortgage payments

-Utilities (electricity, gas, water)

-Internet and Cell Phone service

Groceries and personal items (shampoo, soap, toilet paper)

-Home Insurance 

-Car Repairs


Do you have a goal in mind?

You might also want to set a goal. Do you have something specific in mind you want to buy that you need to save up to purchase? Do you want to save money for a house, buy a car, go on holiday, or renovate your home? It might include planning to save money for your children or that you are having a baby. By when do you want to have this?

Where to create your budget

Person typing on a computer
Photo by Nataliya Vaitkevich from Pexels

You can start by creating your budget by writing it down on paper as a rough guide, and then you can transfer the data onto an excel spreadsheet. Create new sheets at the bottom of your opened excel spreadsheet and label them month-by-month, copying and pasting the essential items you need to purchase. You can then go back to them and delete some items as things change.

4 Tips on how to stick to your budget

Firstly, write down your goals every month, and look at them every two days or once a week, whatever works best for you. Write it down on a post-it note and stick it to the wall somewhere where you can see it as you wake up and go to bed in the morning or stick it on the outside or the inside of your diary, notebook so that you will not veer off track with your spending.

Secondly, if you keep purchasing coffee from coffee shops, this can be very expensive. Plan to limit your visits to two times a week, and the rest of the week, get a flask and consider taking homemade coffee to work.

Thirdly, Get a jar and start popping a few coins inside, and by no time you will see these coins build up. Yes, it might not amount to a lot, but it can give you a sense of satisfaction knowing that you are trying to stick to your plan and goal and will rely on your money less from paycheck to paycheck.

Lastly, Make a list of unnecessary items. Keep an inventory to see whether you will need to buy the ones you already have for the next month.

There are so many options for creating your budget from an excel format or the old fashioned way by writing it down in a book specifically dedicated to recording your budget. But no matter what option you choose, it’s vital to make sure that you have one in place. Without this, you will not see growth or expansion in your savings.

Head over to Martin Lewis Money-saving website, where you can download a free budget planner. 

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