January is often the month that we’re skint and money stress is at its high. Overspent on Christmas and no money left for the New Year… December pay checks are usually paid before Christmas, which although great for the Christmas budget, isn’t as good for the bills. To top it all, January is also a longer month so it means longer to wait till payday.

It doesn’t have to be all doom and gloom though!

By following a few simple tips and adapting little changes in your life you change it all.

Preparation is the key to success

It’s true! Have you ever heard that saying ‘fail to prepare, prepare to fail’?

I know what you’re thinking, this sounds like hard work… It really isn’t and just stay with me.

Create your budget

You don’t have to be elaborate with this, all you need to do is write down all of your incomings and outgoings.

I normally start with my income at the top and outgoings below. I split my outgoings into fixed costs (bills etc that I have to pay) expected costs (food etc) and then unexpected costs (random spends).

When I filled this in for the first time I used my spends from the previous month to get an accurate idea of what I was spending.

Income:

Wages:-

Outgoings:

Fixed costs

Rent:-

Gas & Electric:-

Water:-

Internet & TV:-

Expected costs

Fuel:-

Food:-

Subscriptions:-

Unexpected costs

Clothing:-

Household bits:-

Days out:-

Random:-

That’s a very basic example of a few things that I will include on my budget overview sheet. There will be more things on your overview and how you categorise them is up to you.

You may be wondering how this will help to reduce stress but it puts everything into perspective. By having everything written down in front of you, you can clearly see where your money is going.

Cutting your budget down

So, you can now see where you’re spending your money and some areas may have shocked you already. My food spend for example was A LOT more than I thought it would be. Because I just put everything on my card I hadn’t realised how much it was until it was staring me in the face!

Look at all your outgoings and think if you could reduce them.

Fixed costs like rent/mortgage will be harder to change but can you swap your utility bills to a better deal? Have you actually tried?! It’s actually loads easier than you think. And trust me, I do it every year! And you can cut your bills easily year on year.

Expected costs is an easy one to cut down, do you need that subscription that you’ve not actually used in the last few months? If not then cancel it! Set yourself a goal of cutting your food bill down by £10 a month, just do it little by little. There’s no point saying you want to half your food costs in the first month because it’s probably not going to happen. Hats off if you do though!!!

Unexpected costs are those random spends and do we really need them? Things like no spend months can be fab when trying to reduce these spends.

How to reduce your spending

Now that you’ve created your budgets for each category, you need to start actually spending less. It’s no good just saying you’re going to spend less, that will just increase your stress!

I’ve already mentioned a few things like switching your utility provider and taking part in no spend months. There are also fab challenges such as the 365 day penny challenge that encourage you to start saving more.  

How can all of this reduce my money stress?

Creating a budget puts YOU in control of your money. And yes, you may think you are already in control, but are you? Do you know, without looking, how much you spend on food every month for example. Write down your estimated spends first and compare this to your actual spends. I thought I was in control but was surprised at myself!

One tip that I use is taking my budgeted money out of the bank and having it as cash instead. By spending cash instead of card it feels more real. You see the money leaving your purse and how much you’ve got left. This is known as the cash envelope system by Dave Ramsey.

Does it work?

YES. In the 6 months or so that I have been actively budgeting I have cut my expenses by about half. By ‘actively’ I mean looking at my spends at the end of each month and reducing them for next month.

All of this motivated me to spend just £500 on Christmas this year, you can click on my blog to see how I got on!

I’d love to know how you find budgeting and if you’ve got any questions feel free to send them my way!!!

Author Bio: Hi, I’m Hannah, a 27 money and lifestyle blogger from Manchester. My site is focused on how I live my life in a frugal – some may say ‘tight’ – manner. It features some amazing freebies and bargains that I’ve found over time, including a page of live freebie
links so you can get your hands on them to! I also share my money saving tips and tricks that I have discovered through my own personal journey so far, I do work in accounting but have no financial training or expertise! Everything I write is my own personal opinion.
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