If you’re regularly finding you have more month than money, it might be time to put a budget in place, says Rachel Pearce.


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If you’ve been struggling to get your finances in order, now’s the time to take another look at your budget

You may feel as though you need the rest of 2022 to get your finances back in shape after an expensive Christmas. Perhaps you’ve racked up debt or splurged your savings. Or maybe your circumstances have changed because of ill health or Covid, and you no longer have the same wages coming in.

Whatever the situation, having a fixed budget to work towards will help you work out where your money’s going and make it go a little further each month.

Step one

Pray and take a few deep breaths!

Step two (skip steps two and three if you’re debt-free)

Tally up all your debts. If you have loans, credit cards, store cards or overdrafts, it’s time for a reality check. The first step to turning things around is to get a clear picture of what you owe. Once you’ve done that, work out which debt you are paying most interest on. Focus on meeting all your minimum payments as the priority, but pay the highest-interest debt down first if you have anything extra to play with.

Step three

Cut up nonessential credit cards and ban yourself from websites that might tempt you to spend money you don’t have.

Step four

It may be worth transferring your balance to a 0% credit card or considering a repayment plan if your debt is unmanageable.

Step five

Write down exactly how much you earn after tax each month (if it varies, use your monthly average from 2021). Next, list your outgoings, including regular payments such as rent/mortgage payments, travel expenses, childcare, utility bills and memberships. Don’t forget to list additional expenses such as clothing, haircuts, gifts and charity contributions. It might help to look through your bank or credit card statements to jog your memory. Another quick way to work out where all your money goes is to keep a note of every penny you spend for at least a fortnight.

Step six

Put together a realistic budget based on the information from steps two and three, allowing a little contingency for ad hoc expenditures. Make it pretty if that’ll help you stick to it, and keep it somewhere prominent (think bathroom mirror or laptop screensaver) so it remains at the forefront of your mind.

Step seven

It’s OK to finetune your budget if your circumstances change or you forgot to include something the first time around.

Step eight

Look for ways to reduce your outgoings. Could you downsize, remortgage or switch energy providers? Are you a member of a gym you never use? Could you shop at a cheaper supermarket or sacrifice the expensive lunch you buy every day and make your own instead?

Step nine

It may also be worth thinking of ways to increase your incomings. Could you ask for a raise at work or apply for a new/second job? Could you sell items you don’t really need, for example the car you only use at weekends or the designer clothes you never wear? Could you make money from a hobby such as DIY, art, music or baking?

Step ten

Keep a chart and tick off every pound of debt you pay off/stash away. Give yourself a treat each time you reach a milestone.

If you’ve taken the steps above but are still struggling to stay afloat, don’t be ashamed to ask for help. Talk to a church leader, a trusted friend or family member, a GP, Citizens Advice or a debt helpline if you need support and advice. Help is out there, and you are not alone!

Rachel Pearce is a lover of Jesus, chocolate and a healthy (colour-coordinated) budget.