How to Start Budgeting?

Budgeting is a bit like exercising. It can be difficult to motivate yourself to start but once you take the plunge, it doesn't take long to reap the benefits.

A budget can help you manage your money and plan for the future. If you've decided to create a budget, here's how to get started:

• Know what your net income is. Seems simple, right? Just remember your net income is what you take home after tax and other costs such as pension contributions have been deducted. If you receive any benefits, remember to add these into the pot. If you're one half of a couple, you'll have extra calculations to make.
• Start tracking your expenses. Before you even start a budget, you need to understand what you're spending. It's important that you track everything – even those coffees on the way to work! You might be surprised by how expenses add up. Track your spending for at least a month so that you have a good understanding of your expenses.
• List your expenses and label them. Your expenses will fall into two categories: Fixed expenses are the ones which are always the same and must be paid. Variable expenses can change from month to month and are not strictly necessary – we call them the "fun stuff"!
• Choose your budgeting approach. What works for one person, won't work for everyone. There are several different ways of budgeting and it'’'s up to you to decide which approach suits you.
• Start managing your money. Ready for some more calculations? If the difference between your income and expenditure is making money tight, you may have to make adjustments to your spending habits – remember those variable expenses?!

Now you're well on your way to having an effective budget and managing your money so that it works for you. If you'd like to use the Costs to Expect Budget App, check out our Getting Started page.