Over one in ten Brits admit to being terrible with money. Even with the best of intentions, it can be easy for unexpected spends to put a strain on our finances — but there are ways to better plan ahead.
Budgeting is one of the core foundations of sensible money management, but are you being as thorough as you could be with yours?
Here are five areas it’s easy to forget about that could come back to blow your budget apart.
You may not want to plan everything you’re doing month to month, especially if you like to be spontaneous. Whether it’s eating out, last-minute holidays or snapping up concert tickets however, you’ll still need to budget if you want to do it all.
It’s important to socialise and do things we enjoy — as long as our budget allows it. Put aside a little extra aside for entertainment each month and continue living the life you want to lead.
While Christmas is an obvious event to budget for, birthdays can get a little trickier. Even for the super-organised among us, having none for three months then four in a fortnight can wreak havoc with our budget.
Sit down and work out how many birthdays you’ll be buying for over a year and think about roughly how much you’ll want to spend on each gift. Planning ahead for your friends and family’s birthdays won’t leave you missing out on the celebrations when they eventually do come around.
Quarterly or annual bills
Dealing with essential payments that don’t come out at regular intervals can put your budget into disarray. That category includes things like quarterly council tax bills, or your yearly car insurance renewal.
You’ll want to make sure you can pay your bills on time in order to protect your credit score. Try to work out how much these payments would come to if they were monthly and split the cost accordingly.
We’ve all got our old favourites — but they won’t last forever. Whether you like to shop ‘til you drop, or you’d rather avoid it at all costs, you’ll need to replace your clothes from time to time – and a new winter coat for example won’t come cheap.
Assess what’s on its way out and budget for replacements. If you need certain items of clothing for work or sport, don’t forget to tag these on too.
It’s difficult to predict what might or might not happen, but that doesn’t mean you shouldn’t budget for it. Whether it’s a few hundred pounds for a replacement mobile phone or several thousand for last-minute vet bills, emergencies can get costly quickly.
Adding a little into an emergency fund each month will make it easier to cope should the unexpected happen — and if it doesn’t, you’ve got yourself bonus savings.
Are you adjusting your budget as we speak? Fitting in these five factors should help you stick to it month after month.
To read more on topics like this, check out the budget category