The “b-word”: budget
Hearing the word budget can cause some people to think of hundreds of things that “need” to be done first. But this procrastination – or putting off a task – can be costly. The eZonomics video The cost of procrastination tells how procrastination is one of the main problems associated with saving. Our tips to cut procrastination might help those struggling to take the first steps for organising their budget.
There is another way
A basic budget is often made by tracking fixed and variable expenses, subtracting the total from after-tax income and deciding how to use the remainder. The article How much should I be saving? gives more detail. Regular reviews are a good idea, particularly when there are major life changes, such as a new job or marriage.
There are different types of budgets and some styles may suit individuals better than others. Our Six tips for starting a budget explains the “reverse budget”, which eliminates expense tracking. Instead, a proportion of income – say 30% – is set aside first for savings and investments, with the remainder available to spend.