This is a little different to the usual questions on this feature however I was hoping you may want to help me.
Every single month I find myself completely broke by around the 20th day. I have an average salary so I’m not flush but neither am I going without much wages. However, I have no idea where my money goes!
My bills and other such essential outgoings take up about 60% of my wages. However the other 40% absolutely flies out and I have nothing to show for it.
Is this realistically normal?
Do you have any budgeting tips? For reference, I have a normal social life but I’m not an excessive spender!
The first step is to track every single thing you spend money on. I would recommend doing this for at least a whole month, starting from one pay day right up until the next. Keep a spreadsheet of every outgoing and purchase made, this also includes tiny purchases.
At the end of this month, break these purchases down into categories so you can see where this money has been spent. Start with the essential outgoings i.e. rent, mortgage and utility bills. From here, categorise other purchases which you consider to be essential… this is where you will have to be strict and honest with yourself. For example, Netflix does not belong in this category, this is for things you could simply not live without, like groceries.
Then categorise the things that are not essential that you would like, such as Netflix, Spotify, takeaway food and coffees. You should then be left with purchases which were non-essential luxuries.
I am not going to tell you that you need to cut out all the non-essential luxuries because you do have to enjoy yourself and be happy. Therefore, consider what purchases in each category could be reduced or even taken out altogether. Could your grocery shop be cheaper? Do you have too many streaming subscriptions? Could you live without a takeaway every Friday? There will be wiggle room, you just have to find it.
Track diligently, identify where the excess lies and budget accordingly. The good thing is, January is a quiet month for everybody so it will be a good time to start saving some pennies.
I hope this helps.