Good financial management is all about budgeting. It’s about knowing what is going to leave your account and when. It’s about planning for the unexpected and most importantly not spending more than what you earn and living beyond your means.

I personally believe that everyone should set a month to month budget allocating certain amounts of funds for particular expenses, from your mortgage right down to your month to month grocery shopping. I realise that budgeting might not be high on everyone’s agenda, especially if you have a low income / low outgoings financial situation, but it really can do you no harm. Budgeting allows you to plan ahead, to know what sort of funds you’re going to have left at the end of the month and makes sure that you don’t over spend and leave yourself too short to pay that unexpected bill such as a car repair or other unfortunate, unplanned for event.

Planning a budget is relatively straight forward. We simply need to document what we earn, document our outgoings (planned) and work out the difference. From the funds left over we can then allocate as we see fit. Of course you don’t need to be a financial wizard to plan a budget either. There are some fantastic applications on the market for budgeting and general money management such as the software suit from Kublax. This application has become a god send in my own personal financial management, purely because it remembers what is coming out and when from my numerous bank accounts.

Incidently, Kublax have recently published the results of a survery on the UK spending statistics. There was no real surprise in the report other than the fact that we all seem to spend similar amounts on our outgoings and that we all pay a significant portion of our monthly income towards credit card or loan debt. What was also particularly surprising is how much the difference in rental / mortgage costs are between the North and South of the country. There really is a huge divide.

adminGeneral11 Aug, 2009