How do you stay on budget?
The easiest way to keep track of your budget is by creating a budget template in Excel where you sum up your income and expenses each month. It does not have to be complicated – on the contrary, the easier it is, the easier it will be to keep track of your monthly budget.
Create a budget and keep it – 8 smart tips
1. Note everything you buy
Use a notebook or app; the important thing is that you really write down everything you buy – not just the big expenses but everything.
Keeping track of everything you spend over a period as short as two weeks can provide unimaginable insights into waste that you were barely aware of.
In addition, you see how quickly the costs come up in fairly high amounts.
If you use the Easyliving Credit Card, you can see all your purchases in the Collector Banks app available for iOS and Android.
2. Create an annual budget and a monthly budget
Go through all your expenses. Food, accommodation and transport are usually three of the biggest cost items and once you have kept track of them and other fixed costs that you have, you know what you have left for clothes, travel, entertainment and more.
Decide how much you can spend in each category and how much you should save.
3. Stick to the shopping list
Many people split their budget when they buy food hungry or if they get the idea to try a new, exciting dish with a lot of ingredients that they will not use more than once.
Right now is not the time to be adventurous in the kitchen.
Stick to your shopping list that you have created based on your needs and do not deviate from it no matter how tempted you are in the grocery store.
4. Give yourself a weekly allowance
Decide how much money you are willing to spend each week on things like gasoline and food and decide not to exceed that amount.
Maybe only your weekly allowance should be available in your account every week?
5. Eat more homemade and do not buy snacks and drinks in town
A very good way to save money is by avoiding restaurant visits. Have breakfast before leaving home in the morning, bring lunch and plan your dinners.
Even drinks such as coffee and bottled water are often very overpriced in kiosks and shops and if you instead drink your coffee at home and refill the water bottle at the same time, your budget will thank you.
6. Have multiple bank accounts
Having several, different bank accounts is a fantastic trick to make it easier to keep track of your personal finances.
Create an account for savings, an account for fixed expenses and one for variable, such as food and entertainment.
This way, you know that you always have money for everything you need and see what is left within each category.
7. Stop throwing
Many of us are careless when it comes to maximizing the products we buy, which is bad for both the wallet and the environment.
Decide to use every bit of what you buy. Squeeze out the toothpaste tube and eat your leftovers from yesterday’s dinner.
Also, do not leave the taps running and keep track of the food in the fridge so that you do not have to throw away food that has become old by mistake.
This is a very good way to get a full dividend for your money.
8. Compare costs
Review your fixed costs and compare different suppliers to find out if you can squeeze prices. Today, there are many smart online services to help you compare prices and services.
Price comparison sites help you compare prices of goods so you can buy it from the cheapest supplier.
An example is Basket.com where you can see which store has the cheapest food.
What is a budget?
A budget is a plan for your income and expenses over a period of time.
The purpose of a budget is to balance your income and expenses and make sure that the money is sufficient for the entire period to which the budget relates.
For companies, the budget is an indispensable tool that is necessary to get an overview of the company’s finances and plan operations.
But even you as a private person can benefit greatly from a budget. A private budget is most often used to plan finances one month at a time, as most of us get paid monthly.
But of course there is nothing to stop you from drawing up an annual or weekly budget as well.
Regardless of the time frame the budget covers, the goal is to give you an idea of how much money you have to move around with and what it is enough for.
This way, you can more easily plan your finances, plan purchases and get money for entertainment and savings.
Why should I make a budget?
Without a budget, it will be difficult to get an overview and control your finances.
How much money can you spend on entertainment and restaurant visits without risking being completely broke the week before salary? If you are rich as a troll, this matters less. The money is still enough.
If you are like most others and have an income in the normal range, a lack of control and too many impulse purchases can lead to you having to live on noodles the days before pay.
Or in the worst case that you are without money if you come across an unexpected but necessary cost.
Without a plan for your finances, it will also be more difficult to save money for long-term savings or other things you want to do.
For many, it is not low incomes that are the cause of a messy or lame personal finances, but rather poor control and many unnecessary purchases.
Anyone who does not plan their finances in a budget also becomes very sensitive to sudden expenses. You can not be sure that the money will last the month.
And what happens if your car breaks down, you get a water leak in the kitchen or have to go to the dentist urgently?
Plan your expenses
As a private person, no one forces you to have a budget and no one will punish you if you do not follow the budget you have established.
See the budget more as guidelines and a tool for creating order and order in your personal finances.
With the help of a budget, you do not have to think about how much money you can spend on non-essential things like entertainment and clothing.
By sticking to the budget, life will also be much easier if you get unexpected expenses. The budget makes it possible to structure your finances and get more money over.
You may even be able to save money for long-term savings.
Money that can be the base plate for a future home purchase or something else fun you want to do but did not think you could afford.
Make a household budget – Start with the income
Establishing a basic budget is not difficult. Write down yours and break down your income and expenses in a typical month.
How much is your monthly income and what are your recurring expenses? The income is usually the easiest to get the right side of.
Most of us have a steady monthly income that comes into our account every month. Possibly together with a few minor side incomes such as child allowance and the like.
If you are a freelancer, self-employed or for some other reason have several different or varying incomes, it is of course more tricky.
Then I recommend that you calculate an average monthly income. Or even better, the lowest possible income you can possibly get.
Then you will avoid unpleasant surprises later on. No joy calculations in other words.
Map your finances
Once you have mastered your income, the next step is to go through all the expenses you have in an average month.
Pick up bank statements and, if necessary, receipts for a few months back. By going through your previous expenses, you get a good idea of where your money goes and how much you spend on different things.
If you feel that you have poor control over where money goes, it may be wise to use a credit or debit card for all purchases.
Then you can see all your purchases on the bank statement or card invoice.
Fixed and variable expenditure in the budget
A private household budget for expenses usually divides into three parts; fixed expenses, variable expenses and other / entertainment.
Fixed expenses include only what you really need and costs you can not avoid. Everything else, ie purchases and costs that are not necessary to cope with everyday life, are secondary and belong in variable costs or entertainment / other.
Do not cheat when creating your budget.
To make a good budget that lasts the month, you must always start from the most important things, the ones that keep you afloat.
Examples of fixed expenses:
- Housing costs
- Food (excl. Restaurant visits etc)
- Transport (car, bus pass)
- Borrowing costs
Variable expenses are costs that vary from month to month. This mainly includes things that may very well be nice but that you can actually live without.
I count food as a fixed cost because you can not do without it. When drawing up a budget, you should set aside a fixed amount for food purchases and count it as a fixed cost.
Outdoor lunches, buy coffee and other restaurant visits, on the other hand, fall under variable costs.
In many cases, the individual expense items are small, but together it is often a lot of money. This is also where you have the opportunity to save money.
An energy drink for $3 a day is, for example, $90 a month and almost $1100 in one year.
Examples of variable costs:
- Movie tickets
- Restaurant visit
- Vacation trips
- Sweets, coffee, snacks
- Media services like Spotify and Netflix
- Buy stuff you do not need
Start by looking at bank statements and write down any purchases that are not immediately necessary. How much is it? For many, this amount comes as a surprise.
Maybe it turns out that you spend four-figure amounts every month on things you don’t really need.
Set a ceiling for your unplanned variable purchases in the budget and stick to it. You will notice a big difference at the end of the month.
You might even get a hefty penny left over.
This is what a budget can look like
A simple but efficient budget can look like this.
Of course, how large a share of the fixed and necessary costs will be of your income depends on how much you earn and how much housing costs and other necessities you have.
- 50% for fixed expenses such as rent, electricity and telephone subscriptions
- 30% to other costs such as entertainment, clothes, outdoor lunches and other things you can live without
- 10-20% for savings
You must, of course, adjust the levels to your own income and fixed expenses. If you spend 60 percent of your income on rent and recurring necessary costs, there will of course be less left over for other things.
The advantage of using a budget is that you see how much money is spent in each category and can thus more easily adapt your buying behavior.
Budget tips! – This is how you keep track of expenses
It can be a little tricky to keep track of all the expenses you have in a month. But if you pay most things by card (which most people do today) it does not have to be difficult at all.
If you pay a lot of cash, it can be a good idea to note this down or get a receipt app that scans your receipts and puts them in a digital cash book.
Many stores also offer digital receipts if you pay by card or mobile.
An alternative may be to switch to only trading with one and the same card. You get all expenses in one place and can pick out everything you need via bank statements or your internet bank.
Feel free to do a thorough reconciliation at some point in the leave or quarter, as you will probably sometimes receive bills that do not appear every month.
Otherwise, it is easy to miss fixed expenses that often have to be paid quarterly or semi-annually, e.g. insurance and certain electricity contracts.
The most important thing when establishing your budget is to be realistic and honest with yourself.
If you know you can not stop with a cup of latte before work every morning, you should of course take this into account.
The budget should reflect what your finances actually look like, not how you want it to look under ideal conditions.
This is how you stick to the budget
It can be tricky to stick to a budget. But as I have mentioned before, a simple solution to get better control is to create an Excel document and write down all your expenses every month.
There are many ready-made budget templates you can use to download online. Feel free to choose as simple a variant as possible (or create one yourself), then it will be easier to continuously fill in the budget and stick to it.
You will immediately see if you stick to the levels you set for entertainment and other variable costs.
This will also make it easier to decide what you can cut back on.