Topic: Personal finance October 14, 2018
Author: Neil Cubley

Can’t face making a budget?

Bank of Ireland budgeting
2 MIN READ

Most experts agree that regular budgeting is the way to keep on top of your finances.

But creating a personal or household budget probably isn’t most people’s idea of fun.

It’s easy to come up with reasons not to budget.

Here are 7 reasons people say they don’t budget and why they might just be wrong.

1 I don’t want to deprive myself

When some people think of budgeting they automatically think scrimping and saving.

But budgeting isn’t about spending as little money as possible then feeling bad if you do buy something nice for yourself.

The first aim of budgeting is simply to make sure you aren’t spending more than you earn.

Even if you are on a very tight budget, you should still aim to enjoy life.

Buying a takeaway coffee or going out to eat occasionally should not be forever out of reach.

Simply tracking what you spend your money on tells you where your money goes but it doesn’t actually reduce your money.

And if you don’t track your spending then it might affect your credit rating.

2 I don’t want to know the state of my finances

Some people never open bank or credit card statements or check their account balances online because they just don’t want to go there.

However, sooner or later there may not be enough money in their account.

A bill may not get paid or a card may get refused.

At this point, any issues with their finances have to be faced and they may have to pay additional fees and charges they might otherwise have avoided.

It may be possible to continue this living way indefinitely but it’s an expensive way to live and it can damage your credit rating making it more difficult to get approved for loans, including mortgages, in future.

3 It sounds like too much work

It doesn’t have to be.

You can set up a basic budget in a lunch time and refine it as much or as little as you want later.

The first thing you need to work out is how much income you have coming in each week or month then how much you spend on essentials and non-essentials.

If you need to, you can then choose to reduce your spending or increase your income.

4 I know I won’t cut back even if I know I should

You can protect yourself from your own overspending habits by setting up a direct debit to transfer money out of your main account each week or month to a savings account or deposit account soon after you get paid.

You might also want to ensure that it’s not too easy to claw back that money (in case you spend it) but that if you really needed it you could get it.

5 I don’t like maths

Fortunately, you don’t have to be a maths genius to budget.

There are plenty of budgeting tools available that will automatically keep a running total of your income and expenses and take away your total expenses from your total income for you.

Alternatively, you can make your own budget on a spreadsheet if you are already familiar with a spreadsheet package.

This online budgeting tool from MABS, the Money, Advice & Budgeting service should take 15-20 mins to create a budget.

6 I’m making a good living

Even if you are doing well now you might like to know that you are on track to meet your larger goals.

If your biggest goal is to save enough money for a deposit for a house you may get there quicker if you cut down on non-essential expenses.

But you won’t know precisely how much you are spending on non-essentials and how much you could save towards a deposit unless you track your spending.

7 I’m not looking to buy anything big right now

You might not be saving a deposit for education fees, a house or a car right now and may be happy to use up all your disposable income.

But things change.

In a year from now or in 5 years, you might decide that you want to start your own business or move home because you want to have a family.

And you might wish you’d been tracking your spending so you could have been saving regularly for a while.

We can’t know what’s around the corner but having a budget may help us smooth out life’s ups and downs.

It might also help you set up a rainy day fund.

Find out more
A regular saving account like a Bank of Ireland Goalsaver may make saving money a little easier. Find out more here.

Terms and conditions apply.

Topic: Personal finance October 14, 2018
Author: Neil Cubley

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