This is for you whether you have an ongoing budget & you're setting up the new month after signing off last month, OR you are just getting going.
Life is changing fast, here in the UK we just had the announcement that mortgage rates are going to be increasing AGAIN. I feel like crying, we're in the process of remortgaging as my beautiful 5 year fixed deal has ended.
Normally I would have been ahead of the curve in securing a great new deal rather than leave it this late in the game, however with the entire cost of living crisis & uncertainty plus some other life stuff going on, I decided to wait it out.
It's looking like we might be going for an interest only mortgage if possible for a short while - this is not a long term answer of course but for a year it will make things run more smoothly for us while the economic crisis reaches its crescendo and calms down again - as it will inevitably do (it will right?)
So in setting up our money plan for the month it's of paramount importance as I always say, to do a few things first in order to maximise our ability to make this the best plan of action to suit us. So mind in gear first, calculator out second.
Here are my 5 steps:
N° 1.
Review how you're doing so far this year. Are you progressing? Are you stable? Has some shit hit your life fan & created a level of challenge nearing a crisis? There's no point not being honest with yourself & covering up any problems.
You can't fix your leaky money bucket by poking chewing gum in the holes or worse, pretending they're not there.
If you followed along with my 5 steps to round out the month you'll know that this is a great way to keep in control of what's going on. You might not like what's going on but not looking at it doesn't change it!
Being in control is liberating & feeling that changes your daily decisions.
As hard as it is, and as emotional as you feel, you're not alone.
Repeat after me, I am not alone.
Deep breath - it's going to be ok, this too shall pass.
With a planned approach you will get through this.
I was delivering a group coaching online yesterday and one lady put in the chat, "What if you've more money going out than coming in?"
It got me thinking that if I still lived on my own I'd be getting close to being in financial trouble.
My response was to not delay in getting proper support.
I'd start here, Step Change. Check them out after you've finished reading this short blog. Please hit the like button at the bottom of this post too please ❤️
When you're in control you can SEE ahead of time that you could be heading for trouble.
This is better let's be honest, than finding you're up to your neck in it and wishing you'd sorted things out long ago. And in that, is my philosophy of creating your budget so that it spans months ahead not just hand to mouth month to month.
Starting each new month with a reflection on the previous, don't forget your mindset as well as getting your calculator out, also means adjusting future months when you need to.
So our mortgage is now a new fixed expense & I've factored that in to our budget for the next few months - until a new mortgage deal is found at least.
N° 2.
Open your mind again to your dreams, they may seem further away than a year ago but nevertheless, they will only but gain momentum when you keep them close.
What are you aiming for in the next few years?
What short term goals do you have? If you need some help read this short blog next, there's a freebie in that one that will help you make yours.
We all need a guiding light to move us forward in the right direction, what is yours?
N° 3.
Starting where you are now, with the bank balance you have, with the savings you have (or haven't) put down your number at the top if you're on paper.
So if you're in your overdraft put -£800 for example.
Make a list of your income.
Where it's coming from, when & how much.
You might like to use a calendar, a notebook or a spreadsheet.
Personally I use a spreadsheet.
You might like to have Income into your main account, then move budgeted money for daily living into another account or maybe onto your cashback card ready to spend & get money back.
Then move budgeted money into a 3rd account for ad hoc fun money.
However you like to do do it that makes it clear & easy for you to see what you've got at all times, then do that.
Budgeting is part organisation, part planning ahead blended with today's reality being lead by tomorrow's dreams.
I can be profound after a few coffees!
Ok so you've got your income from it's various sources with total month added up.
Take this from your current bank balance.
From an organisational stand point, this always feels more settled when I do this as close to the 1st of every month as poss. But whenever you do it if you can keep it consistently at that point every month it will be much easier.
Next ensure you've got your regular expenses listed. I like to do this in priority order although in date order works just as well. Mortgage / rent, bills, rail card, car payments, loan & credit card repayments etc. Things that left unpaid will create massive problems.
Is there anything in these regular expenses that isn't accurate, or can you find a way to make any of these things less expensive?
I am a bill boffin & will be able to work some magic on yours so that you pay the least amount possible in the UK. Have a quick look here & contact me for an easy going chat
So how much have you got left over now your essentials have come out of your income?
Take this as your new figure. If you're over 45 your maths lessons at school for long division would have called this the remainder number. Or something like that, maths was pure hell for me - I know, the irony!
But that's why I'm so passionate about budgeting because it makes perfect sense to me & I create spreadsheets for people that hate them so they can love them instead!
N° 4.
With your new figure to work with you're now going to take out your daily living expenses. These tend to be more variable.
Food, fuel - prices are fluctuating like mad so it's tough to be accurate but you can only do your best.
Have you got the dentist or opticians this month, someone's birthday or going out for a family lunch?
Now you've got the idea for this you can add this up and take it away from your new balance - you're creating a filter, like it?
N° 5.
How much have you got left over?
Do you want to buy yourself some new clothes? Buy your partner a pressie?
You may find that clothes & haircuts especially for the kids will probably come out of your daily living section but this is just one way of many you can approach your budget from an organisational standpoint.
No one size ever fits all when it comes to money so please work yours out in a way that brings you clarity.
This step might give you extra money to pop into savings or chuck at the overdraft.
With the cost of living as it is, it might even get swallowed up again to pay for normal things that are now twice the price they were.
You might not have any left over to begin with!
But if nothing else you are now in your driving seat, asking yourself some questions, exploring some solutions & reorganising a few things so that you have greater visibility & clarity over what you have got.
Money gets used up really fast, so does time.
Being as organised as possible with your own process, systems & way of doing things will help enormously particularly when the difficult economic wind is blowing on us all.
Feeling stressed out, overwhelmed & confused leads to relationship problems, sleeplessness, poor diet & your mental health takes a battering.
Get organised
Get help
Control your controllables.
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