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If you’re looking to get a proper handle on your budget in 2020, this post featuring must-have budgeting tools and frugal living tips for managing your finances correctly is the place to start.
Why should you have a budget?
I know – the thought of sitting down and writing a list of rules for how you spend your money can be…off-putting. It’s fun to be spontaneous! To treat yourself! To have a great day out, without fretting that you’re ‘going over’ that month!
The thing is, though? That kind of mentality doesn’t gel, long-term. That kind of approach to spending leads to credit card debt, money worries, and frustration.
Having a budget will allow you to:
- Make practical, achievable long-term plans for your future
- Evaluate your real priorities in life and adjust your spending around them
- Make more informed career decisions
- Pay off debt and start saving
- Build up an emergency fund for unexpected life incidents
- Give yourself a safety net for the unexpected – both positive and negative
The list could go on. The fact is, learning how to properly budget your money is one of the most positive changes you can make in 2020.
Pssst..! While you’re here, make sure you’ve unlocked your free access to The Wallet Moth Freebie Library, which is absolutely full resources all designed to help you start building a life that works for you, including free cheap & healthy meal planners, printables, a minimalist declutter checklist, and so much more!
How to create a budget from scratch?
Below are my absolute must-have budgeting tools and tips for total beginners. In this guide, I’ve broken down:
- How to start tracking your income and expenses
- Financial decisions you should be considering
- Tools that will help make budgeting second-nature
- Easy changes you can make to start living more frugally today
Related Posts to Read Next:15 Amazing Budget Hacks to Save Over $12,000 Every Year
Tracking Your Income & Expenses
It’s simple: you need to know how much you’re earning, and how much you’re spending, in order to know your budget.
Do you know, really, how much you spend each month, let alone each year? It can feel like a picky, tiresome task for sure, but even committing to tracking your spending properly for a couple of months can bring an entirely new perspective into your spending.
A money tracker is one of my number one must-have budgeting tools for anyone who needs a better insight into their spending. The following trackers listed are all FREE to sign up to – so there’s no reason you can’t get a better look into your finances today.
Money trackers often cost nothing to sign up to and use (you just need an email and phone number for security purposes when logging in), is super secure to keep your data safe, and is fantastic whether you want to just track your income and outgoings each week, or whether you have more technical tracking requirements such as investments.
- YNAB (You Need a Budget)
- Yolt (UK app)
- Dollar Bird
Personally, I use Yolt to track my daily spending, and QuickBooks to give me a greater understanding of my income, expenses, and what expenses can be deducted on my Self Assessment tax return. QuickBooks is really helpful if you make any kind of self-employed income, while Yolt is great for day-to-day tracking.
Alternatively, there are literally hundreds of free printable budget templates out there that you can print off and fill out each month.
Other financial decisions to consider
If you’re looking to invest your money in 2019, you’re already adopting a financially savvy approach to making investments. Studies have revealed that millennial women are investing less money than anyone else – simply because they don’t know where to start or how to choose the right company to invest with.
Many people opt to visit a financial advisor to begin investing, but for many people, an online broker has all the tools you need to invest, with total control over your investments. Check out this guide to the best online stock trading brokers to find out more.
Building An Emergency Buffer
An emergency buffer is essentially a bank of savings to protect you if you need to pay for unexpected costs – such as your car breaking down, for example.
Aim to save at least 2 – 3 months income and keep this topped up at all times – having this security need is so important if you want to be confident in your financial decisions.
An overwhelming number of people live with hundreds or even thousands of dollars/pounds of debt every single day, and simply accept that as their reality.
For some, debt is unavoidable. An unexpected breakdown in your career, personal circumstances, or life can mean going into debt is a necessity.
What is not a necessity, however, is simply going deeper into debt. Repaying your debt should become a priority in your life, and your budget should be organised to factor in how much you can pay back on a regular basis. This article on Debt Repayment from Money Saving Expert is really helpful for this.
Tools to make budgeting second nature
Cashback and voucher programs
Cashback and voucher apps/programs are a fantastic way of saving on your online shopping and day-to-day spending. The mentality to have here is every little helps. Programs I recommend checking out include:
- Rakuten (formerly eBates)
- Honey App
Trim is an AI app that securely syncs with your bank account and automatically scans for:
- Subscriptions you don’t actually use or need
- Bills you’re paying too much on
Then, with your permission, it will negotiate a better rate for those bills – helping you to save money on autopilot. This is an extremely clever app and makes saving money on the things that you probably don’t really have time to sit down and go through so much easier.
I mentioned QuickBooks earlier, but I really do think this is a tool every self-employed person should be using. Before I started using QuickBooks, I had no idea what expenses I could put down as business spending for my taxes and was probably paying far more tax than I should have been.
QuickBooks instantly gives me a clear idea of my monthly income, profit, and expenses, and makes filing my tax returns so much more simple.
A budget tracker app
I’m not a die-hard fan of any single app enough to dictate what one you should be using, but budget-tracking apps can make budgeting so much easier.
Either download one of the apps available (Yolt, Mint, Money Dashboard etc), or print out one of the free templates I linked above and get into the habit of evaluating your income and expenses, and where you could potentially save more money each month. This one simple tip is a life-changer.
Frugal Changes You Can Make Today
Weekly Meal Plans
Planning your meals for the week and even cooking them in advance can be a massive money saver. Each week (preferably a day or two before you do your weekly shop), make a plan of the meals you’ll cook that week. If you end up with the same meal three nights of the week, then so be it – as long as it’s tasty you won’t mind, and cooking in bulk is always cheaper!
I’d recommend finding a style of cooking you really enjoy, and using those recipes as staples each week. Experimenting with cooking new dishes is fun, but it can get pretty tiring after a long day at work and you’re starving!
Food bloggers (or should I call them influencers now?) I really enjoy following for their simple but delicious recipes include Pinch of Yum, Deliciously Ella, and The Minimalist Baker.
I also have a Weekly Meal Planner that you can download for FREE in my freebie library – but first, I’d highly recommend checking out this list of free grocery list templates, meal planners, and more.
A smart meter will show you exactly how much energy you are using each day in pounds and pence, allowing you to monitor how much your monthly bills will be and adjust your energy usage to suit your budget accordingly.
In the UK, every household is entitled to a smart meter free of charge, so there is no reason not to make this change today and really take control over your energy usage. This will also go a long way to helping you reduce your impact on the environment, so it’s a double win. You can find out more about smart meters on the official web page here.
We have a Nest Thermostat installed in our house and it’s a great way of controlling the temperature of our home throughout the day.
It automatically heats your home according to the way you live (for example, if you get up at 7 am, it will start heating the house at 6 am so it’s warm by the time you wake up!), and can also be adjusted from your phone. That means you can keep the heating off while you’re out the house, and set it to turn on as you’re on your way home.
This may not seem like a super-savvy budgeter tip, but Amazon Prime TV provides you with access to thousands of TV shows and movies for just $99 per year – with 30-days completely free at the beginning.
That’s a huge saving compared to your typical Sky or Virgin TV box.
Click here to sign up to your 30-day Amazon Prime trial (cancellable at any time), and see if it makes a difference to the TV you enjoy. If it doesn’t, making the switch could be a great way to save money this year.
Consider ways to increase your income
Selling items you don’t use any longer is a fantastic way to make some quick and easy cash each month. Every time I clear out my wardrobe or a room in the house, I’ll select items to donate, and items that are still in great condition and that will sell well online.
A few of the best sites and services I always use to sell online include:
- Decluttr (this is great for old CDs, DVDs and other electronics!)
Why not check out this great guide on saving money on eBay from a blogger totally killing the game with her eBay business.
How do you stay budget-savvy in your daily life? Let me know your must-know tips in the comment section!
I love YNAB and meal planning. They were quite useful when I was at college and I cannot live without it now, they help me save!
Thanks for sharing 🙂