Living on a Budget

One of my goals this year is to finally sort out my finances, including the start of paying off my student loan and earnestly paying into a pension.  While I was deciding on this goal I did a lot of research, read a number of blogs, and, I have to admit, binged watched a lot of YouTube.  The one piece of advise they all had in common was that all paths to financial success started with a budget.

Whilst I have read a lot of (and watched a lot of) Dave Ramsey's advice on how to get out of debt, the main person I'll be following for advice is actually Alvin Hall, mainly because I have his book 'Your Money or Your Life' which I brought years ago but never actually used.  The whole point of a budget is to 'tell your money where to go' (I believe this is a Dave Ramsey quote), but, as pointed out by Alvin Hall, you first need to work out where it's taking itself and importantly why it's taking itself there.  Finding out why you're spending the money on what you're spending it on is hugely important as it not only lets you see where you might be emotionally spending (to make yourself feel better), but also where you might just be spending money because you're haven't made simple preparations in advance.

I've already been doing a spending diary for the last month and though it hasn't necessarily given a 100% accurate picture of my spending (as I've been homeless and living with my parents for about a month) it has still highlighted some crucial things.  Mainly, I do still comfort eat when I'm upset and I spend way more than I should on 'treats' whether food or jewellery.  I thought I had more of a handle on these than I actually do and this has been a very helpful eye opener to the fact that I don't.  Neither of these habits is particularly good for my health, my bank balance, or for the planet.  I will need to watch myself in the future and keeping an eye on my spending should mean that I am able to keep these two habits in check.

Though this hasn't been a very realistic month I can still use the information I've gained from this exercise and my knowledge of previous expenses to put together an initial budget, which I can tweak as necessary.  I am expecting this to change as, as yet, I'm not completely certain what all my compulsory expenses will be or even my exact income.  However, the plan this year is to have 15% of my wage go to a pension scheme and at least 10% go to paying off my debt.  Having a budget ready to fit all these numbers in will be extremely helpful.  

Moving forward I will be using my trusty (and now slightly battered) Your Money or Your Life book, as well as Your Dollars Count app (which can be converted into pounds) to help me put together a workable budget.  And I will be updating you on my progress in my goals update post in April.