WHAT ARE YOUR TOP TIPS FOR BUDGETING YOUR MONEY AND NOT GOING OVERDRAWN

Question

WHAT ARE YOUR TOP TIPS FOR BUDGETING YOUR MONEY AND NOT GOING OVERDRAWN

Answer 1

Step 1 - Open up a seconday account for bills and make sure all of your standing oders and direct debits come out of this account.

Step 2 - Figure out how much your monthly SO+DDs come to. Add £50 as a reserve, and set up one final standing order from your regular account (into which your salary is paid) into your new bills account. This should debit on the same day that your salary is paid in (the day after at the very latest) and cover all bills for one month.

Step 3 - You can now see how much money you have left to spend until the next payday. Divide this figure by the number of days until you next get paid, and you now have a daily budget. There may be somedays where you spend nothing, and somedays that you spend double your daily budget - but only spend more if you have some left over from previous days. If you are on a particularly tight budget, it may be worth withdrawaing 7 days worth of money at the start of every week. This way, once your purse/wallet it empty, you know you can't spend any more without going overdrawn.

Step 4 - The day before payday, you will be able to see how much money is left in your regular account and your bills account. Ideally this should be just above zero. If you've been good, you may have more. Whatever is left in either of your accounts, you now need to transfer this to a savings account. Even the pennies soon add up!

Hope this helps planning your budget.

You also need to look at ways you can cut down on the amount you are paying out each month. This may include -

- planning a weekly home menu and only ever visiting the shops once to buy for the full week

- restructuring any loans or finance you have

- cutting out unnecessary subscriptions

- plan nights in rather going out

- car sharing or switching to public transport

- reviewing your enegery, phone, mobile, water and broadband suppliers

Good luck!