This months money chat amongst the UK Money Bloggers community was about budgeting. We discussed who does it, how do you do it, why do you do it and what tips could we give to those who are not yet doing it!
Managing your finances
Kirsty at The Money Saving Mum has been super strict for the last 5 months using both a mixture of apps and budget spreadsheets because she was sick of not 100% knowing where every single bit of her money was going especially due to the fact she is now self employed. Budgeting on a spreadsheet allows her to see exactly where every single penny of money that comes into the household goes without it dwindling or over spending and keeping track on an app allows her to see where exactly her money is.
Emma Drew says her entire life is digital but for budgeting she cannot beat pen and paper because writing it out helps her to feel connected to her money more enabling her to spend more consciously.
How to create a budget spreadsheet?
Mrs Mummy Penny has a new method for this year and say’s it is working really well. Lynn and Faith at Much More for Less, recently completed very detailed spending diaries and compared for a blog post, only she has kept the spreadsheet going! She explained that everything goes in there, even her £2.19 coffee from Macds! She lists it and then allocates it to categories and analyse at the end of each month. She then splits it down further into things like groceries, bills, things for boys (clubs, school dinner, footy etc), eating out, fun stuff for family and fun stuff for just just her.
The actual finite budget does vary each month because it does depend on her previous month turnover so she allocates budget on a % basis as recommended by fellow blogger Emma Maslin:
- 40% of her turnover to bills
- 10% to pension
- 10% to holiday fund
- 10% to investment, tax, fun money, bus expenses etc etc.
Dr Nikki uses a spreadsheet because she can input all the data herself and see exactly what’s going on! Nikki, who blogs at The Female Money Doctor, explains that doing it on a spreadsheet not only means it adds up itself but she can choose how it is laid out. She says not being able to have it the way she wants is what she finds annoying about apps. “It does it for me, so I don’t feel “connected” with the numbers. A budget is the only way I can set aside money to invest or save. If I didn’t, I’d never make it happen!”
Budgeting is key to knowing your money and being more effective with your finances says Miss Many Pennies. She explains how it can help you save up quicker, pay off debt faster, see where you’re overspending etc. Another spreadsheet lover here as she too uses them for everything, but if you don’t feel like writing your own formulas, pen and paper will work just fine.
Fran at From Pennies to Pounds says that starting a budget now will help you to create a plan for your money. Budgeting doesn’t mean that you aren’t wealthy – it means that you organise your money into areas that you want to spend money on, and stop spending on things that you don’t.
You can use anything you feel the easiest way for you and your circumstances: pen and paper, apps, spreadsheets etc. There is no right or wrong answer though as to how you budget – it’s all about testing the different methods and finding which one works best for you
Francesca uses pen and paper – as she has always found writing stuff down manually the best for her as it registers more in her brain; it just feels more real and relative to her.
Miss Penny Money thinks a budget is essential for anyone who wants to get a better grasp on their finances to avoid overspending. She uses a combination of a planner and a spreadsheet. A printable planner is great for easy access and for manually keeping track of what’s gone out of my account. The spreadsheet has basic formulas in it to add up and balance the incoming and outgoings.
Catherine at The Money Panel recorded a podcast episode on this subject so click to listen to “getting financially naked.” She says you have to start with looking at what you’re spending but also with your attitude to money. If you have a spontaneous relationship with money for example using an automated app can help you (like Emma, Plum) automate the habits. A spreadsheet may be too daunting and overwhelming so start with pen and paper so identify your areas of overspend and then use the envelope system in that one area. For example food budge
Money management apps
The Money Whisperer is one of many who is a fan of app’s like Money Dashboard, Yolt and Emma. Writer Emma Maslin is in no way connected with the app Emma 😉 but says that they take the pain out of looking at all of your historic transactions to see what you typically spend money on. They are also linked to your bank account/credit cards so when you spend, your budget is updated in real time.
Sara’s parents used pencil and paper. Although Sara, the founder of Debt Camel, still encourages use of a spreadsheet because it adds it all up for you she doesn’t see why anyone starting to budget now wouldn’t start with a proper budgeting app on their phone. It will do much of the work for you effortlessly.