Does the word “budgets” make you picture spreadsheets and complicated calculations?
Know that it doesn’t have to! Budgeting is simply about understanding your money so you can make it work for you, not against you. Think of it as your personal financial GPS, guiding you to your dreams!
But first, You Might Be Thinking… Why Bother with a Budget?
Firstly, a budget isn’t about restricting yourself. It’s all about empowering you. When you know where your money goes, you can:
- Find Hidden Savings: Discover money you didn’t even realise you had!
- Reduce Stress: Fewer surprises mean more peace of mind.
- Achieve Your Goals Faster: From a new car to a dream holiday, a budget shows you how to get there.
- Build Financial Confidence: Take control of your financial destiny.
With that in mind, our wealth management advisors are here to simplify budgeting for you.
So What Do I Do?
Let’s start off with the 50/30/20 Rule. Forget complicated systems, come try this simple, effective approach:
- 50% for Needs: This covers your essential living expenses. Think housing, utilities, groceries, transportation and minimum debt payments. These are the things you can’t live without.
- 30% for Wants: This is for everything else that brings joy to your life! Eating out, entertainment, hobbies, new clothes, subscriptions and holidays. These are the things that make life fun.
- 20% for Savings & Debt Repayment: This crucial chunk is dedicated to building your financial future. This includes your emergency fund, retirement savings, investing and any extra debt payments beyond the minimums.
How to Implement It:
- Calculate Your After-Tax Income: This is your take-home pay each month.
- Allocate Your Funds:
- Multiply your income by 0.50 for Needs.
- Multiply your income by 0.30 for Wants.
- Multiply your income by 0.20 for Savings & Debt Repayment.
- Track Your Spending: This is key! You can use:
- Apps: Many free apps link to your bank accounts and categorise spending automatically.
- Spreadsheets: If you love detail, a simple spreadsheet works wonders.
- Pen and Paper: Sometimes the simplest method is the most effective. Just write it down!
Keep in mind that the goal isn’t perfection, it’s awareness!
If your “Wants” are creeping into your “Needs,” you’ll see it and can adjust. And if your “Savings” are falling short, you’ll know exactly where to make changes.
Budgeting is a flexible tool that should adapt to your life. The most important thing is to start, be consistent, and find a method that works for you.
Now, if you’re ready to take control of your spending and start working towards your financial goals, our financial advisors at Moneytree Wealth Management are here to provide you with personalised guidance and support from Chester, the Northwest, North Wales and beyond.
Get in touch to learn more!
Approver Quilter Financial Services Limited August 2025.
