LOQBOX Learn: How to budget better
One side-effect of the government’s coronavirus measures is more time to evaluate your current financial position. Creating a budget is one of the easiest ways to do this. This installment of LOQBOX Learn will help shed some light on what budgeting is and how you can get started planning your budget.
Why should you budget?
A budget gives you an overview of your income (how much money you have coming in) and your expenses (how much you’re spending). It will help you see whether you have enough to cover your costs and do the things you want to do. Using a budget planner is a great way to review your financial position, manage your money and set yourself some goals.
How can you budget?
The ‘50/20/30 rule’ helps you budget better by splitting spending into three categories: living expenses and essentials, financial goals, and lifestyle. Here’s the idea.
- 50% of your income should go on living expenses and essentials – rent or mortgage, food, bills, work travel and so on.
- 20% should go towards your financial goals – saving or paying off debts.
- 30% should go towards your lifestyle – non-essential, nice-to-have things like home improvements or family activities.
The simple trick to better budgeting
There’s no magic to making yourself better off. But it can be easier said than done.
Think of your spending in two categories. ‘Regular’ costs that tend to come out of your account as Direct Debits, like energy bills, rent or a mortgage. And ‘daily’ costs that you probably pay with cash or card, like groceries, travel and eating out.
Try picking one thing from each of these categories and see if you can reduce it today, a little saving on a regular cost can go a long way.
Kick start your savings with LOQBOX
- Set yourself a savings goals
- Build a savings habit by making regular monthly payments
- Make these savings work harder by boosting your credit score
- Grow a savings pot
This post was written and compiled by the credit experts behind LOQBOX – a completely free way to build your credit history by saving as little as £20 each month. To sign up or read more about the clever way LOQBOX works, head to LOQBOX.com.