Learning to budget is an essential life skill!

It is a basic financial skill to master, to ensure you do not spend more than you earn each month.

Once you have mastered it, it will help you to live within your means, and hopefully help towards building up a savings pot and then start investing it for the future.

Please read on to learn more.

Where do I start?

Excel is a good place to start. Or you can use a free budget planner app, there are plenty to choose from. This can then be saved on your phone and you can access it at any time.

Start with your income, your regular net pay and also include any overtime seperately, as well as any benefit you receive.

Then detail all of your expenditure starting with rent or mortgage, utility bills, loans, credit cards etc

Once your expenditure is deducted from your income, you should be left with a surplus.

Use 2 current accounts

Yes, it may sound odd but hear me out.

This is the easiest way that helps me. My main account is where my income is paid into, and all my direct debits and standing orders go out from. The debit card for this account stays at home and is never used. This ensures I always have enough money to pay my essential bills such as mortgage, rent, gas and electricity, mobile phone bill etc

My second current account is with my same bank provider. This is what I take out with me to pay for petrol, food, clothes, meals out etc. I can clearly see what I have to spend each month.

Set up savings pots

These can be used to save towards specific goals and also towards some annual bills. These could be towards your car tax, insurance & service costs, house insurance or ground rent and maintenance charge. You could also have a separate pot towards your holidays. A number of banks allow you to name your individual savings pots so you know what you are saving towards.

Now please put into practise the tips you have picked up here!