Help! How do I make a budget?

We all know culling your morning latte won’t actually result in an overnight house deposit – but how do you get a grip on your finances, especially during these tricky times? We find out…

MONTHLY

BREAK THINGS DOWN

‘This is key to taking control of your money,’ says Casey Goodwin, a financial planner and head of paraplanning at ethical finance firm Path Financial. ‘Start with your total income (minus deductions for things like taxes), then list all the essentials you spend money on each month, such as rent, fuel, bills and food.’ Free budget planner apps can help, too – MoneyHelper* has a credit card calculator to sort out your upcoming payments, while Emma combines all your accounts in one place. Heads up: some offer ‘premium’ features at an extra cost.

ALL IN ONE

Whether it’s physical paperwork (think: bank statements, receipts and bills) or digital documents, file them all in one easily accessible place, Goodwin advises. Then, get your direct debit ducks in a row; it may take a few calls, but arranging your utilities and rent to be paid on the same day (ideally payday) makes it easier to manage a budget.

THE BIG SPLIT

Separate your salary into two bank accounts. ‘One for bills, that you can’t touch, and one for general spending,’ Goodwin says. This will help you to track ‘fun spends’ vs ‘fundamental spends’. Bonus tip: open your second account with a bank that gives out cash rewards for joining or switching to them – MoneySavingExpert lists some of the best offers available.

SAVE WHAT YOU CAN AFFORD The current cost of living is high, and many of us simply can’t put aside big savings each month, says Goodwin – but you can always start small. ‘When you first start saving, it’s not the amount that matters, but allowing the habit to form,’ she stresses. ‘Gradually, it will feel natural to increase your savings amount each time, adding up to a healthy pot and more confidence in money management.’

WEEKLY

TAKE STOCK

At the end of each week, carve out some time to ask yourself, ‘What could I have saved money on? What did I really need? What could I have gone without?’ ‘We all have busy lives, but your finances should be a priority,’ says Goodwin. And your answers can form your goals for the next week or month, eg, ‘I want to save £50’ or ‘I want to halve how much I spend on food’. Make sure your goals are SMART (specific, measurable, achievable, realistic and time-related).

NO-SPEND CHALLENGE

Ask a pal to join you in a ‘no-spend’ challenge for a week (or longer, if you’re up for it). Having a buddy will encourage accountability (and maybe even healthy competition). When the urge to get a takeaway appears, you can both figure out a no-spend solution instead (eg, cook a meal together, or if you can’t meet up, individually follow the same budget-friendly recipe and swap photos at the end). Transfer the money you’ve spared by not ordering pizza into a savings pot straight away to stay motivated.

WAIT IT OUT

Spotted something you have to own? Curb impulse purchases by giving yourself a waiting period. Two days, or even a week if you prefer, will allow you to consider whether you really need that new top/outfit for your cat. ‘Shopping can be emotive; when we’re feeling a little blue, we may spend to try and feel better,’ says Goodwin. ‘Set yourself a sensible ‘single spend limit’ – mine is £75 – and if a single item costs more than that, I’ll wait at least a week before committing. If I’m still thinking about it, haven’t considered an alternative or have enough savings available, I’ll make the leap,’ she says. Another hack? Set the item as your lock screen – if you’re bored of looking at it before your waiting period ends, it’s probably not worth the splurge.

DAILY

ROUND UP

If you’re struggling to save, check if your bank offers a service that rounds up your transaction to the nearest pound, squirrelling away the difference automatically. ‘This is a great option for generating small savings, particularly if you don’t look at your bank account often,’ Goodwin adds. Even if you only amass £20 a month for a little treat, it’s something to build upon.

MENTAL WEALTH

A topic not often discussed is how financial worries can affect our mood, says Goodwin. ‘Maintaining a healthy lifestyle, getting plenty of sleep and keeping active – if you can – will help. Try to have a daily routine, enjoy hobbies, connect with your friends and family – and importantly – be kind to yourself.’

BE HONEST

Not only with yourself, but about money in general when chatting to friends and family. That doesn’t mean divulging everything if you feel uncomfortable sharing that information, but talking candidly with the right people can present important life lessons from those who have been there, done it and have wisdom to impart. ‘Money is an emotive topic. If we’re in financial distress, advice from our close circle can be invaluable, as is knowing we have a support network to help us through the bad times,’ Goodwin says. ‘It doesn’t always need to be an extreme discussion. Asking a friend who they bank with, who they save with or if they pay into a pension can get an enlightening conversation going.’

FINE-TUNE YOUR SOCIALS Following money-management experts, such as @MartinLewisMSE and @MyFrugalYear, who share their own tried-and-tested tips, can help top up your motivation levels (and provide relief from any ‘buy me!’ temptation posts that creep into your feed).