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THE BRIGHT APPROACH TO BUDGETING

09-Nov-2016

For many of us the term budget conjures up thoughts of hardship and frugality, but it shouldn't. “A budget need not go hand in hand with negativity, if well thought out and well managed, budgets can be extremely empowering and liberating,” says Ali Toumadi, Prosper Founder and Director, who believes everyone can benefit from a budget. 

Get a budget in place you’ll benefit from a real sense of control. It helps you enjoy managing your money and makes reaching financial goals more of a certainty.

What’s the right squeeze? How tight is right?

The secret to a solid budget is establishing the right level of pressure. You want to be realistic about income and outgoings, while also setting goals that demand a little squeeze, but not so much that things seem unobtainable. Budgets that are too tight are hard to stick to, so you need to be truthful about how much you need… and that includes factoring in ‘feel good’ purchases – as while not technically essentials, these feel good purchases are must haves when it comes to ensuring emotional happiness!

Where to start  

  • Keep a record of your daily spending over three months. Mortgage or rent payments, bills, hire purchases, clothes shopping, your daily coffee, birthday pressies… there’s a lot to consider! Thankfully bank statements make this record keeping pretty easy.

  • Identify annual costs such as holidays, vehicle licensing, school fees etc.

  • Detail your income – including monthly pay and added benefits, allowances, even the interest on any income you have saved. 

  • Add up all the money going out and then compare it to how much is coming in. The aim is to have a suitable surplus to enable you to have some money left to save for your big goals (or pay off debt faster). 


If you want some personalised advice on how you can better your budgeting and build a bigger surplus for saving, don’t hesitate to get in touch.