If we have long term savings plans, travel goals, or are working towards a regular saving habit, budgeting is key. But how far should we take our budgeting? We could take it to the extreme and save the majority of our income, living a very frugal lifestyle. On the other hand, we might only be saving the tiniest percentage of our income and never reach our savings goals. I decided to do some research into how we can budget, but still enjoy our lives. At the end of the day, reaching a destination isn’t worth if it you’ve hated the journey along the way (yes I’m a poet).
1. Saving once per month
I’ve often heard that your budget should only be addressed once or twice per month. If you’re constantly thinking about how much you’ve saved, it’s going to take all the enjoyment out of life. You can sit down and sort out your budget at the start of the month, and review it at the end. Upon reflection, you can see how realistic your budget was by the end of the month.
2. Split it up
If you split your income when you get your payslip at the start of the month, put your necessary savings away first. I’ve often heard people refer to this as, ‘pay yourself first’, which unfortunately doesn’t mean splurging €500 on yourself, but investing in your future self first. Try to avoid touching these savings (this is obviously the hard part). You can set up savings accounts that require 7 day access to your funds if this is something you struggle with, here is further information on the types of savings accounts that require notice to withdraw funds.
3. Consider upcoming spending
Many people have a monthly saving goal. However, no two months are the same. There’s been months where I’ve had several friends and family member’s birthdays, an upcoming holiday and several dinners I’ve agreed to. Other months, the most I’ve splurged on is a meal or two out. At the start of each month, consider what you may have to spend extra on.
Of course, you cannot plan for everything. Leave a little wiggle room in your budget for unexpected plans that may come up. However, birthdays, events, concerts, holidays etc. are always a good one to keep an eye on and consider when you’re saving for that month.
4. Automated payments
Most banks can set up automated transfers from your current account to your savings. A lot of people find this very helpful, as they don’t have to think about their savings. If you are doing this, consider setting the transfer amount to your minimum saving goal. If you can allocate extra funds on certain months, you can do so yourself. Set a realistic number that seems doable depending on your income and outgoings.
5. Review
There isn’t much point in setting up a budget if you never review it. As much as we would all love to avoid it forever.
It’s a good idea to check if your budget went according to plan at the end of the month, or every couple of months. At certain periods in your life, you may need to make savings/ spending adjustments, which is perfectly fine. Your life doesn’t always look the same and neither should your budget.
6. Don’t beat yourself up
I think I apply this tip to every aspect of my life when I probably could do with a slap at times.
If you don’t stick to your budget, you can always make adjustments and try again next month. Oftentimes, we over estimate in almost every aspect of life (me when I tell myself a blog post will only take me an hour to write, edit and make graphics when I know fine well that’s a pile of s**t).
If you’ve overestimated how much you can realistically save in one month, that’s okay. Redo your budget and start again. There’s always unexpected things that pop up now and again. You are not a robot and can’t stick to everything consistently xx life happens.
I hope you found this post helpful! I previously did a post on ‘Easy Budgeting Tips For Beginners’ if you have no idea where to start. I’ve found some of the techniques have definitely helped me.
See you next time,
Eilís x
