Budgeting can be fun!

I know this title is going to be a hard one to sell. But hear me out…

Most people wince or roll their eyes at the thought of budgeting. They see it as depriving themselves in some way. Not being able to buy the things they enjoy or have any fun.

But I like to think of having a budget as the opposite of that. Its all about making sure you allocate spending to the important things in life (such as financial freedom) and reducing the amount to the things not adding any value (do you really need another pair of jeans, shoes, handbag….insert as applicable).

So where to start?

A good place to start is with a budget planner or spreadsheet that you can fill in with all your monthly expenses. There are lots of free budgeting spreadsheets on the internet, here is a good one – Budget Planner: how to manage your money – MoneySavingExpert you can save the excel version to your computer or print it out. If feeling adventurous you can create one yourself, you get bonus points for that!

Then look over your bank statements from the past few months and see where your income has been going. You don’t need to beat yourself up on this. But “What isn’t measured isn’t managed” (a famous person once said) so you need to know where things stand at the moment without judging yourself, so you can manage it going forward.

Next step is to think about whether the spending in each area is adding value to your life or not. If the answer is no then this is probably an area you could cut back on or eliminate altogether. Some expenses probably can’t be changed very easily such as rent or mortgage. But other areas such as TV packages, subscriptions, eating out or clothes shopping usually can.

By reducing the expenses that aren’t adding value to your life you can pay more into the exciting expenses that align with your values like your financial freedom. You will then literally be buying more free time. Now hopefully you’ll agree that does sound like fun!