Budgeting tips for the New Year
ITV Daybreaks money expert Martin Lewis has got some great tips which could help families to budget in the New Year:
Are your outgoings more than your incomings?
How much do you earn each year and how much do you spend each year? Unless you know the answer to both of these questions you won’t be able to balance your books.
The reason many budgets don’t work
Often many budgets don’t work because one months spending is only taken into account. Spending patterns change frequently so remember to look at weekly shops, annual holidays, clothing allowances, car repairs, car tax etc. If you know you spend around £1000 a year on a annual holiday then this needs to be budgeted in as around £84 a month.
Other reasons that budgets don’t work is because many people often miss out the little things. For example a motoring categories should really be broken down to petrol, car insurance, breakdown cover, new tires, MOTs etc. You need to factor all of these aspect in.
Think beyond a month
When first sitting down and planning out a budget make sure you have a few months worth of bank statements,bills and credit card statements and then work out the average for all of them to give you a more accurate idea of outgoings.
For example, with food shopping gather receipts for the past three or four moths and divide them to work out and average spend.
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