The key to writing a successful budget lies in the detail as a budget relies on making sure that all income and expenditure items are accurately assessed and included so as to ensure that nothing is missed.
Perhaps the most straightforward place to start is by listing all sources of income, be it is salary, bonus or interest from savings or from a pension it is important to know what you have to spend before you get to spending it!
As with any budget, looking at too short a period can mislead as the timeframe may not include all payments, for example, some income may come as annual bonus or in quarterly interest therefore look at the whole year where possible to determine an average month.
This will give you an idea of what needs to be saved in months where there is a bumper income and help understand why you may run out of cash at other times.
Next is to get to grips with the outgoings. This is usually harder since not everyone keeps a handle on what they spend and where. Start by taking the big costs like mortgage or rent payments. These will be followed by utility bills for electricity, council tax, gas and telephone.
Looking over a year will also help to remember items like household and car insurance bills. Remember that as part of the budget process you can use a comparison websites to check if you are getting the best deal.
The next layer of cost is usually more difficult to assess since it covers items such as food, clothing and entertainment. Analyse credit card and bank statements over a long period to get an accurate feel for real expenditure rather than guessing.
Remember that any budget will never be 100% accurate – that is not really the purpose. It is to provide you with a guide to where your money is spent and what you have left over to save or spend on luxuries. Using comparison websites as a reference guide can also show ways you may be able to spend less and earn more.
Armed with a good all-rounder comparison website, your salary slips, credit card and bank statements it should be a straightforward task to create a family budget that optimises income and expenditure. These days, that can be the difference between a comfortable lifestyle and struggling to make ends meet.