When it comes to budgeting, it’s not creating one that’s the challenge. With tons of apps, helpful tools, and plenty more financial advice available online, modern folk have all the support they need to set budget goals to achieve those short and long term aims. Where the problem lies is sticking to said budget. As a leading cash for clothes service, we help people from all walks of life earn money from their unwanted clothes, funds that can be put to good use paying off debt, saving for a rainy day or giving yourself a long overdue treat. Whatever your objective, budgets are great ways to get to where you want to be. Whilst there are many reasons to start a budget, there are many more that stop us from sticking to our carefully prepped financial plans.
According to research gathered by Standard Life, 60% of people have a budget, yet the remaining 40% don’t due to lack of time, lack of confidence or simply because they find budgeting boring. Lack of willpower and failure to budget better are other reasons why people create budgets with all the best intentions yet find them difficult to stick to. It’s important to remember though that being boring now can lead to lots more excitement later. Students in particular find budgeting a difficult experience, in fact 39% of the student population don’t budget their money at all. With the right advice and the hacks mentioned below however, budgeting can be a breeze, whatever your circumstances or budgeting experience. Meaning you can enjoy all the perks of meticulously managed finances to save for your summer holiday, afford a healthy deposit for your first home, or gather funds to do something you’ve always wanted to do.
1. Start off on the right foot
The secret to successful budgeting? Starting off with a realistic plan in the first place! So many people looking to budget set goals that simply aren’t achievable, but budgeting within your means is the key.
Begin your budgeting journey with a solid plan by calculating your income and expenses. Use the last six to 12 months to create the most accurate picture of your finances and leave no stone unturned. Your bank statements, receipts and other financial paperwork will definitely come in handy here. By determining your expenditure and income (don’t forget to include any other income you receive alongside your wages), you will have all the information you need to set realistic savings goals. If your mission is to use these savings to settle some debts, plan ahead and review your interest rates to identify which debts it would be better to settle sooner rather than later. Being realistic is integral to sticking to your budget and reaching those financial goals.
Don’t set your budget in stone either, complete an annual review to ensure your budget continues to align with your goals. You should also celebrate those milestones as and when you achieve them, and adapt your budget accordingly.
2. Get smarter with shopping
Food shopping is one of the biggest household expenditures for UK families. Along with transport, communication, travel and eating out, the cost of food and non-alcoholic drinks has witnessed a significant increase in recent years, putting a burden on budgets up and down the country. The average UK family spends 10% of their monthly income on food and non-alcoholic drinks according to the Office for National Statistics’ family spending in the UK report. Getting smarter with your food shopping could however free up funds to stick to your budget and put even more money away in the process.
Planning your meals is a top hack used by many budgeting enthusiasts. Plan out what you’ll be eating for breakfast, lunch and dinner each day, not forgetting the snacks, and devise your food shopping list from here. Resist the urge to shop when hungry too. Shopping when hungry makes it much more likely that you’ll grab what looks good, regardless of how that relates to your meal plan. People with meal-specific lists tend to spend less than those who shop and go. Planning ahead with meals in mind and not going to your supermarket on a daily basis for your ‘top-up’ shopping is essential to slashing what you spend on food.
3. Opt for home cooking
We’re not saying don’t go out at all when budgeting, but eating out is very (very) expensive. Treat dining out as the luxury it is and opt for home cooking – putting your new, meal-specific food shopping list to the test – the majority of the time. Cooking at home more often and opting for packed lunches when you would have otherwise grabbed food on the go are two more musts for those serious about budgeting. This simple switch could in fact save you hundreds or even thousands of pounds every year.
It’s not just eating out that should be made budget friendly, the true cost of the UK’s coffee addiction is a bitter pill to swallow. The average Brit spends around £2,110 in high street coffee shops – that’s equivalent to 8% of the average UK salary of £27,000. The average person visits a coffee shop three times per week, with each individual trip costing an eye-watering £13.85! Making your favourite coffee based beverage at home and taking it with you to work could save you more than you think.
4. Organise with your social calendar in mind
Life doesn’t stop just because you’re on a budget. Even if your purse strings are a tad tighter, you shouldn’t miss out on the social occasions that make life as fun as it is. Birthdays, weddings, anniversaries and retirements are all extra expenses most don’t consider when planning budgets. Allowing some extra funds to be dedicated to each cause when these big life events arise is important. By planning ahead in accordance to your social calendar you can continue to save, and not splurge, when special occasions come along.
Giving yourself an allowance is a must when creating a budget you’ll actually stick to. Taking out your allowance in cash will also ensure you keep track of your expenses (both daily and occasional) and stick to your plans.
5. Say “no” to delayed payments
Paying with a credit card is far less painful than spending cash, that’s a fact. Spending on credit, debit and charge cards has grown at its fastest rate since the recession with people able to make seemingly guilt free purchases and worry about the bill a few weeks later. Some 60% of the UK population have a credit card, making the prospect of delayed payments a troubling reality for the vast majority. By getting rid of those credit cards, settling any outstanding balance and not facing the prospect of delayed payments again, you can spend less, worry less and save more.
6. Rethink what you spend your money on
It’s not just how you spend your hard-earned money, it’s what you spend it on. Talking yourself out of purchases is more difficult than it sounds, particularly if you’ve had your eye on some goodies for a while and they’re now available at a discounted price point courtesy of a well-timed sale. We reckon many of the customers sending unwanted clothes our way wished they’d have said “no” to some of their purchases!
Ask yourself the ultimate question – “do I really need this?”. If the answer is “no”, as it often is, then maybe purchasing it isn’t such a great idea. Finding it difficult to talk yourself out of a purchase? Remind yourself of your financial goals. Is that new pair of shoes really a great trade for a once in a lifetime getaway? Sleeping on your purchases also helps so hang fire on tearing off those labels and keep that receipt handy.
7. Continue to track your expenses
Whilst tracking expenses is an essential step in defining a realistic budget that works for you, tracking your progress and continued expenditure can provide an insight into how you’re really coping with your new budget and whether it needs adapting. Keep all your receipts and even create your own for outgoings where receipts aren’t provided. Review these receipts at the end of each day, making a note of the final figure. Use these figures to find your monthly total and determine whether you’re still spending too much or too little.
8. Get a budget buddy
You don’t have to face the harsh reality of budgeting alone. Many people find the challenges of sticking to a budget much easier to overcome with a buddy in tow. Known to many as an ‘accountability partner’, a budget buddy can help you create and stick to your plans at every turn, and vice versa. So, who is the perfect budget buddy? If you’re married or in a relationship, your natural budget buddy will be your spouse or partner. You may even share common savings goals to help you stick to your plans further and achieve those joint financial objectives. A money savvy friend or family member will also be a great ally when budgeting.
9. Be savvier with clothes shopping
When budgeting, it’s so easy to say you can do without the luxuries that you’ve come to love, particularly during those early days. One luxury that most people spend on from month to month is clothes. We receive tons of unwanted clothes every day from those with a passion for fashion, but giving your wardrobe a spring clean isn’t the only way you can save extra money to achieve your budgeting goals.
Altering your shopping habits is a great step towards swapping your shopping habits with a more budget friendly approach. Shopping at charity stores, thrift sales and budget outlets is recommended, giving you the clothes, shoes and accessories you need at a fraction of the price. You’ll find some great things for your home in these low-cost haunts too, so give it a go, the results may surprise you.
10. Separate finances with different accounts
Whilst most banks and building societies aim to make life easier by being all things to all people - most offer bank accounts, overdrafts, savings accounts, credit cards, loans, mortgages, insurance, investment and even car finance all under one roof – opting for separate bank accounts may just work wonders for you sticking to budgeting goals. When you get paid, use multiple bank and savings accounts to split your money into smaller, more easy to manage pots. Many individuals have separate accounts for savings, fixed expenses like bills, and spending money, covering expenses from food shopping to fun. By utilising separate accounts for these three areas of expenditure, you can see only the money you can spend.
11. Waste not, want not
It’s surprising how much we waste in the modern day, and with resources so readily available, we tend to waste a lot across pretty much every category. Food is the biggest area of wastage worldwide, the UK throws away £13 billion of food every year. Reducing food waste is always a hot topic as a result, but you can cut waste across every area of your life. Never buying more than you need, switching taps off and not leaving them running or dripping, saving leftovers for lunch or dinner the next day, and switching off the lights every time you leave a room are just some of the ways you can cut waste from day-to-day. You’ll be surprised by how much difference the little steps will make.
12. Find more ways to save
Increasing your income, particularly when you’re already working full time, isn’t easy but it’s not impossible. There are many ways you can save money and even make a few extra pounds, including trading unwanted clothes for cash, becoming an extreme couponer, and switching suppliers for household essentials. Find out more about how you can up your income and save money to put towards your bigger goal by reading our guide to saving more.