Let’s face it – the rising cost of living in the UK is hitting hard. From petrol prices to energy bills, it feels like everything is getting more expensive by the day. It’s fair to say there are no easy answers, and the sad reality is that sometimes, it will be impossible to make it all add up.
But that doesn’t mean it’s not worth a try. And if you are looking at ways to ease the pressure a bit and feel more in control, there’s one good place to start: budgeting.
Budgeting is simply a way of managing your money by creating a plan for your income and expenses. It might sound like a chore, but it’s actually one of the most powerful things you can do to get a handle on your money and achieve your goals. Here are just a few of the advantages of budgeting that can help you in these tough times:
You’ll know exactly where your money is going
When you create a budget, you’ll be able to see exactly how much money you have coming in and going out each month. This can help you identify areas where you might be overspending or wasting money. It will also give you a clear picture of where there could be opportunities to cut back.
You can plan for unexpected expenses
One of the biggest sources of financial stress is unexpected expenses – such as a car breakdown or a broken boiler. With a budget, you can start to set aside money each month for these kinds of expenses, (perhaps paying it into your savings) so you’re less likely to be caught out later.
A budget helps you to plan for the future
Whether you’re saving for a house deposit, a holiday, or your retirement, budgeting can help you get there faster. By making an active decision to set aside a portion of your income each month, it can become easier to move away from the day-to-day grind. It frees up time (and money) to think about the longer term and what you want to get out of life.
You’ll feel more in control
Money worries can be incredibly stressful and can impact your mental and physical health. But by creating a budget, you can take control of your finances and reduce your stress levels. Knowing that you’re managing your money well can give you peace of mind, saving you sleepless nights, and give you the confidence to make spending decisions without guilt or worry.
By creating a budget, you can see where your money is going, plan for unexpected expenses, save for the future, and reduce your stress levels. Best of all? You can use our budgeting tool to get started. It’s provided by MoneyHelper, an independent and impartial service backed by the UK government. The results of the tool are 100% confidential (neither we nor MoneyHelper can see your answers), and it’s completely free to use.