A Budget: Your Road Map

Imagine you're about to start the engine of your car for a 4-hour journey to a place you're somewhat unfamiliar.  The car is packed, fuel tank full and your kids are excitedly strapped into their car seats in the back.  You're not entirely sure of every turn you're about to make, so you're a bit nervous that you'll miss that important exit/slip road off the motorway and that landmark that is "so obvious", let alone make it to your destination with before dark and with enough fuel to make it the whole journey. To your relief, you look up and see your new GPS is already programmed with your current location and final destination. Not only can you rely on this new piece of equipment to get you to your final destination, but you were super organised and have a map of the country in the glove compartment (just in case) and the phone numbers of the AA and that of your final destination already programmed into your mobile and written down (again, just in case).  You turn the key and start the engine confident you'll make it smoothly, with perhaps only a few minor "bumps in the road", to your destination before nightfall.

At the beginning of each month or just after your monthly salary is credited to your bank account how do you feel?  Are you excited to start the month (the journey) with a full tank but not sure whether it will last you the next 4 weeks (4 hours)?  What happens if you put the pedal to the metal and burn through your fuel in the beginning of the month rather than drive cautiously and carefully through the month to arrive on the 31st with a little still left in the tank?

What I am eluding to here is creating and following a monthly budget.  Before the month, your journey, begins, having a plan for where your hard-earned money will be going in the coming month is critical for confidently and successfully making it to your next payday and for saving for future expenses.  A budget provides you with guidelines to follow so you know where every penny is being spent.  It puts you in control of your finances rather than letting your money control you.  A budget helps you to spend confidently today so you can plan and save for tomorrow.

The idea of setting up and sticking to a budget may be daunting, but start simple. You may want to start by simply keeping track of what you spend on a daily basis for a month so you have a good idea of one month of expenses. Then at the end of the first month you can prepare a budget using this list of the expenses.  Or you may already have a good idea of your expenses and can either create your own budget using pen and paper or a programme like Excel, which I use.  Please feel free to contact me to request a file of a budget template to use.

Budgeting is the key to "finding the pennies".  Knowing where every penny is spent gives you better control on the road for the journey ahead.