Budgeting is an essential skill for families to manage their finances effectively. We know it’s a difficult time for a lot of families and we’re all more conscious of what we are spending and how best to budget and try to manage our income more efficiently. We asked you on Instagram to give us your top tips when budgeting, things that have worked for you and ways you’ve managed to save some money. Here are your top budgeting recommendations for families:
- Create a Detailed Budget: Start by creating a comprehensive budget that outlines your monthly income and expenses. Include all sources of income, such as salaries, benefits, rental income, or any side gigs. Then, list all your monthly expenses, categorizing them as fixed (e.g., rent/mortgage, utilities) and variable (e.g., groceries, entertainment). I like to further categorise mine into direct debit and non and which date each month the DD comes out. I try to move them all to the same date so it’s easier and they’re paid as soon as my salary goes in. This will give you a clear picture of your financial situation.
- Track Your Spending: Keep a record of all your expenditures, no matter how small for one month in a notebook or on your phone (I took photos of receipts). This will help you identify areas where you can cut back and make informed decisions about your spending. Many budgeting apps and tools are available to simplify this process.
- Set Financial Goals: Establish clear financial goals for your family. These goals could include saving for a holiday or home improvement (it’s always a holiday for me), paying off debt, or building an emergency fund. Having specific goals will motivate you to stick to your budget and make necessary sacrifices.
- Build an Emergency Fund: Aim to build an emergency fund that can cover at least three to six months’ worth of living expenses. This fund will provide a safety net for unexpected financial challenges, such as medical expenses, car repairs, or job loss, without derailing your budget.
- Review and Adjust Regularly: Budgets are not static; they should be regularly reviewed (I do mine monthly) and adjusted to reflect changes in your financial situation. If your income or expenses change, update your budget accordingly. Periodically, assess your progress toward your financial goals and make any necessary course corrections.
Practically the thing most recommended by you guys was Revolut – I’ve done this myself, I have a vault set up for each expense (food, petrol, classes, socialising, clothes etc) and each month I move whatever cash I need for these expenses into Revolut and then move them into their vaults. When I need to spend money from a vault I move them out. It’s really helped me to be more conscious of what I’m spending.
Next up the grocery bills – these are without doubt the biggest expense day to day that most families have so your tips for this included meal planning (which I do every Sunday), make a plan for the weeks meals and then only buy the food for that plan. It cuts food waste dramatically and helps control spending. Lots of you like click and collect from the grocery shops because you can control what you’re ordering and the money off vouchers were hugely popular for Dunnes shoppers as well.
Some long term sdditional tips:
- Prioritize debt repayment: If you have high-interest debt, focus on paying it off as quickly as possible to reduce interest expenses. We’re talking credit cards here really and overdrafts.
- Involve the whole family: Make budgeting a family affair by involving everyone in the process. Discuss financial goals and teach children about money management.
- Plan for irregular expenses: Budget for occasional expenses like holiday gifts, birthdays, and vacations to avoid overspending when these events occur. I have a vault set up for holidays and for birthdays and put a small amount into this each week to cover expenses when they arise.
- Cut spending where you can: that coffee in the morning for example. the Disney subscription you use once a month? Sky – I managed to more than half my bill by calling them and discussing it. Move your heating and electricity to a level pay bill, it means you pay the same amount every month but you never have that huge winter heating bill for example.
- Save and invest for the future: Once you have established an emergency fund and paid down high-interest debt, consider saving and investing for long-term goals like retirement or education.
Remember that successful budgeting takes time and means being consistent. It’s not easy but it does work.