If you are prepared for next month in advance, it can make sorting out your budget easier than waiting until the money hits your bank account. If you are aware of the situation, you can plan what you need money for the following month and work out some of the basic areas. This reduces the stress or the excitement that you have money again.

Preparing a budget

There are some simple tools that you can use to help you bring your budget into focus each month and can make the process a lot smoother.

• Do you know how much your direct debts are? Sit down with your online bank open, or get a print out of your direct debits from your bank. This will allow you to go through each one and work out when the payment is due and the amount of money that you will need to put aside for all the bills that come out of your account automatically.
• Do you know how much money you need to try to put aside for your future bill payments? Those bills that come out of your account on a yearly schedule that charge you interest if you pay them by direct debt or you know you will need to pay. Car insurance is a great example, they may charge you interest if you pay monthly, paying in one go is often a lot cheaper. You know your car will need a service later in the year, saving up for it on a monthly basis will allow you to spread the costs over the entire year and it reduces the amount that you will need to find in one go when the service is due. In this area I also save money each month for potential car maintenance, I know that the tyres on the car won’t last forever, so if I put money aside each month then I know that I can afford to pay for the repairs needed when they arise.
• The final category that you need to consider is the money that you need each month: money for groceries, fuel, savings and spending money. Look at what you spent in each of these categories last month, use these figures until you can confirm what you have been paid; you might need to adjust the figures when you know how much your wages are but it gives you the basic information you will need. Don’t forget to include some wiggle room; I put a small amount of money aside in a flexi option, this is where expenses come up in the month that you hadn’t expected, like a school trip.

Once you have worked out these areas of your budget in advance, putting the final touches in place when the money hits your account, you will have completed the basic foundation of your budget for the month and this will make it easier when you come to complete your budget.