5 Steps to Make a Successful Budget in Burford

5 Steps to Make a Successful Budget in Burford

Posted on August 24, 2021

We talk a lot about budgets and budgeting on our blog. That’s because effective budgeting is the foundation of a successful financial future and that’s something we want for all our customers. With that in mind, we asked our Burford auto loans team to outline the 5 steps needed to make a successful budget.

Whether you’re saving for a car loan, down payment or something else, knowing how to make a successful budget can help.

Use a free spreadsheet to build your budget

You can use pen and paper if you prefer but a free spreadsheet program like Google Sheets is also effective.

Create one column with your income after tax and another with all your outgoings. Add a third column with all your debts in order of interest rate with the most expensive at the top.

Make sure to make the spreadsheet as accurate as possible and to include every single regular outgoing.

For discretionary spending like eating out or occasional purchases, group them and use a monthly average so you can track that too.

Create saving buckets

It’s rare that we save for one thing at a time, which is where savings buckets come in. Some savings apps and some accounts will have buckets. Otherwise, you can use virtual buckets tracked in your budget.

A bucket is essentially a portion of your overall savings allocated to different things. For example, 50% of your savings go towards a car down payment, 20% to go towards the emergency fund, 30% towards everyday savings.

You can use any proportions and any number of buckets you like as long as you can track them all.

Identify areas where you can make savings

Check your outgoings in your budget and try to identify areas where you could save money.

We all have areas like that. Subscriptions we don’t use, magazine or newspaper deliveries we never read, cable channels we don’t watch. Identify any area where money is being wasted and cut them right now.

You can also identify areas where you could cut back too if you need. Discretionary spending, nights out, clothing allowances, entertainment or whatever you see in your outgoings.

You can save for the long term by cutting back a little or save for a short time by cutting back a lot. Rarely can you do both, so decide which works best for you.

Make budgeting a habit

Once your initial budget has been created, it takes very little time to maintain it. Spend an hour a week or month updating it and tracking outgoings and you’ll always know where you are and how much you can spend or save.

If it is a down payment you’re saving for, you’ll have it done in no time. Then you’ll have a tangible reward for your efforts.

We appreciate that budgeting isn’t the most exciting pastime in the world but it’s one of those jobs that rewards your efforts in indirect ways like staying out of debt, having savings and being able to buy what you want, when you want.

That makes the effort put in to make a successful budget worthwhile right?

Contact Unique Chrysler for help, advice and competitive Burford car finance and leasing.

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