There are many ways to cut your expenses and so to have more disposable income and more money to save, but this is only one aspect of saving money. That’s because even if you were to save hundreds each month by buying cheap food, walking instead of driving and re-using your bottles, you would find that you ended up spending some of this saved money again in other ways – such as on nights out or on things you decide to treat yourself too. Thus budgeting is also highly important and this means telling yourself how much money you are going to save, how much you are allowed to use, and crucially – how much you are going to save.


Effective budgeting then means categorizing your outgoings. You need to decide what you normally spend your money on and then look at how much you are willing to spend on each aspect. So let’s say that you spend your income on food, entertainment and activities, transport, bills and rent, gifts and savings. Now what you would do is to start budgeting and work out roughly how much you need for each aspect and then decide on limits on how much you can spend.

So say you earn $2,500 a month. Let’s say that each month $800 of that is used up in tax, bills and rent – these are things that you can’t change so that doesn’t really come into your budgeting (though if you struggle with budgeting the rest you might have to look at losing your extra channels or changing your mobile provider).

What will come into your budgeting is food (including supplies such as shampoo etc) – say you spend roughly $200 on that a month, you then make your budget (or just slightly lower) meaning that you’re only allowed to spend that much a month. Likewise for gifts you might set aside a budget of $150 and for gifts for yourself you might say $200. You could then say $200 for activities and nights out etc and that would leave you with $950 at the end of each month. It’s always a good idea to have some money to fall back on, so you can give yourself $500 to save each month. Then as soon as you have your pay-cheque you can put that $500 into your savings account to start accruing interest. That’s the brilliant thing about budgeting – you know you can afford to save that much and if you’re strict with yourself you can then predict exactly how long it will take you to save up particular amounts. In this case by the end of the year you’ll have saved $6,000 – which really isn’t bad!

This also means then that if you need to make a purchase of something expensive such as a holiday, you can tighten your budgeting and include a ‘holiday fund’ and again you can calculate how long it will take you to earn this. As a final tip, to make budgeting easier try using software such as a spreadsheet and you will be able to do everything quicker and easier (and make backups!).

6 thoughts on “Budgeting”

  1. I budget all my money carefully. I have my bills set up so they are the same each month so I can know what I will be paying. It works out great. So I also budget my grocery bill as well and only use cash when I buy them so I do not go over.

  2. I never used to budget my money ever. I just spent spent spent. But I have learned from my mistakes. I realize now that I have to budget my money so I can have everything that I want in my life.

  3. I always budget my money. I have to or else I would be in trouble. I have a set amount for everything from gas to groceries. I even give myself a clothing allowance so I do not overspent on items that I really do not need.

  4. I always budget my money. I have a notebook that I write down where all of my money goes. I allot so much for clothes, food and all the rest of my bills. The rest gets put into a savings account.

  5. We never used to budget our money. That is until our daughter came along. Then we had to. With money going for things we were not used to paying for, we had to make ends meet. So we did a budget and are now doing pretty well.

  6. I have budgeted my money since I was out on my own. I do not think it would easy to make it if I did not. I plan on where I am going to put my money. If I do not budget for it I do not buy it.

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