The Chancellor will kick off the Budget with an overview of the nation’s finances and an economic forecast for the coming year, so you’ll probably want to do the same.
Gather together any documents which relate to your family’s finances – wage slips, bank statements, bills etc., and draw up a list of your incomings and outgoings. Be as thorough as possible. This should help you see how much you have left each month for variable expenses, which change from month to month, such as food shopping and entertainment.
Reducing the nation’s deficit is always a focus of the Government’s Budget. While your own debts are unlikely to be quite as large as the country’s, it’s worth considering any measures which could help you pay them off quicker.
As well as factoring regular repayments into your outgoings, can you identify any spare cash which could be used to pay off any debts faster? Identifying which debts have the highest interest rates and making a plan to tackle them first if possible can help save you money in the long-term.
Once you have a comprehensive list of your income and outgoings you’ll have a clearer picture of what’s left in your account at the end of each month and whether you can afford to start saving.
If you are putting cash aside for something in particular, it can be helpful to set yourself a savings target and work out how much you need to save every month in order to reach your goal.
It’s all too easy to look at your bank account at the end of the month and wonder where all your cash has gone – perhaps the Chancellor does the same when he looks in the Treasury’s coffers. It’s easy to account for what gets spent on your mortgage/rent and other bills, but what about the rest?
Why not try keeping track of your spending for a couple of weeks, noting down all your purchases. This should help identify how much you need to budget for extras every month and may help you to make some savings.
Remember to account for big one-off purchases throughout the year too. In 2014, the Government had to budget an extra £1 million for commemoration events to mark the 800th anniversary of the Magna Carta. And you’ll have your mum’s birthday present to save up for, plus special events like weddings you know are coming up. Setting cash aside for these things each month helps spread the cost.
Once you’ve written up your budget you may identify some changes you want to make, whether that’s trying to reduce some of your bills, adding more to your savings each month or paying off your debts quicker.
Think about how you are going to achieve these goals and include your plans in your budget, whether it’s switching your energy supplier to a better deal or walking to work to cut down on petrol costs.