The ongoing pandemic has brought the importance of good money management into sharp focus for millions of people around the world. While the benefits of budgeting are often touted by money experts, the outbreak has shown us that despite how stable you might think your job, income and financial situation is, you never know what’s around the corner.
We hope this list provides the inspiration you need to take money management seriously, and there’s no better way to start than by creating a monthly budget. This free budget template from Wonga will help you manage all aspects of your monthly budget, from managing your food spend to making sure you have a little bit left over for entertainment.
So, what are the benefits of creating a monthly budget?
1. Take Back Control
A personal budget empowers you to make informed decisions about your spending and take back control of your finances. By knowing exactly what money is coming in and going out at any one time, you’ll save yourself the stress of trying to figure out how you’ll pay an unexpected bill and be able to build an emergency buffer for unforeseen expenses.
2. Build Better Habits
Taking the time to think about and document your monthly spending gives you a better understanding of where all your hard-earned income goes. These days, it’s far too easy to whip out the debit or credit card and make a purchase without giving it a second thought. Creating a budget will show you those areas where you’re spending far more than necessary and help you develop new habits, such as spending less on nonessential items so you can pay off more debt.
3. Better Manage Your Hebts
Debt for many people is very much out of sight, out of mind. They know it’s there but they have no idea how much it’s costing them or which debts should be prioritised. Creating a monthly budget allows you to see exactly how much your debt repayments are and how long they’re going to last. From that, you can calculate the total cost of each debt and work out which you should repay first.
4. Focus On Your Goals
Creating a monthly budget will help you avoid unnecessary spending so you can focus on achieving your goals. For example, if you’re saving for a deposit to buy your first home, your monthly budget will show you that the £80 you’re spending on coffee every week could be put to better use.
5. Identify The Challenges That Lie Ahead
Creating a monthly budget will bring to your attention those expenses that you might have overlooked and give you more time to prepare. For example, you might have a tax bill or car insurance premium to pay in the coming months. By identifying these payments in advance, you can reduce discretionary spending in other areas to build a pot of money you can use. That’s a more sustainable approach than being blindsided by an unexpected expense and having to borrow money at inflated rates to foot the bill.
Better Budgeting
Do you create a monthly budget? What benefits has it brought you? Please share your thoughts with our readers in the comments below.
