Let’s just say, in the past, I’ve not exactly been smart with my money. I’ve always been more of a spender, rather than a saver…
But this has always caused me unnecessary stress from payday to payday! Because with adulthood, comes many responsibilities like rent and bills that always have to come first.
So, it was essential for me that I had to set myself some rules.
And if you want the security of having savings in the bank, then you too have to get smart with your money and start dividing your wage responsibly.
All you need to do is take your monthly wage and divide it accordingly:
25% For Rent
So, I actually spend just over a third of my monthly income on rent, but I live in London, so the fact that I’m not spending more than half on rent is a miracle (trust me)!
But you should really aim to only spend around 25%, and if your rent is really high and your wage low, then you’ll have to take a hard look at where you live.
Just last year, I was living in an apartment that was way over budget. And it was beyond stressful trying to keep my head above water. The solution was obviously to move and find something that was way more affordable.
And that’s exactly what you need to do – assess, assess and then make cuts.
10% On Food
Yes, that’s right – just 10% on food, which means your Uber Eats addiction needs treating ASAP!
For the month, you should only spend 10% of your income on your monthly food shop. And it can definitely be done! Even if you have a family there are ways you can cut back without even realizing it.
And sticking to a food budget becomes easier when you plan ahead. The FoodPlanner app is incredible for this, you can search for healthy recipes where you are given the nutritional data you can then add to a shopping list.
20% For Transportation
Everyone commutes, so it’s obvious as to why most of our money goes on travel as it’s a necessity that you have to spend.
But there are ways you can break this up and save on costs. Depending on where you live and how far you can determine if on one sunny day, for example, you could walk home? Or even part of the way home.
Look into cheaper alternatives like the bus, or even try cycling to work, which has amazing health benefits too!
Do whatever you can and wherever you can – and remember, that every little does help.
5% On Clothes/Shopping
This one is a difficult one for me! As soon as it’s payday, I’ve probably spent 10%, maybe more on some new wardrobe essentials, or even home decor!
And as a woman, it’s quite difficult to update the wardrobe, the home and refill your cosmetics with such a little percentage.
But if you want to get ahead, it’s a cut you have to make. And trust me, it’s easier when you know your budget. Now, I can buy things but I know there’s a limit and I’m left with the things I need rather than impulse buying.
10% Automatically Saved
My rule for saving is that as soon as you get paid you automatically put away 10%. And because I’m one of those people that always dip into their savings around the end of the month, I now move the money into an account I cannot gain access to easily.
10% may seem very little for saving, but trust me when I say that it adds up. And at the end of the month, due to this extreme budgeting, I am usually left over with extra money, which I then save too!
20% For Bills
Bills can be really hard to be strict with and something that you have to pay regardless.
The only way you can be smart about this is by planning beforehand.
You need to assess every bill and research if there’s another company out there who can offer you the same thing but for less. Because the truth of the matter is that there are a lot of giant companies out there who compete against each other for customers.
Sometimes, even threatening your current provider with leaving can force them into providing you with a better deal that will save you money. But first, you need to do your research.
Use sites like Compare The Market to compare providers to pick out what works best for you. You can also cut down on some bills by seeing what you need and what you don’t. For example, I have Amazon Prime, Netflix, Hayu and even NOW TV! And by cutting these costs I saved £15 extra a month.
10% Spending Money
So, I’ve been segmenting my money off into categories every payday. I assign every category a budget and that’s it, that’s what I’m allowed to spend. But even after all my careful calculations I somehow always manage to overspend.
And that’s because I wasn’t allocating spending money, which is the leftover money you need when you want to buy things here and there. Because we do buy a lot on a day to day basis.
If you have any money left over from this then great, you can save your extra pennies. But you need to give yourself some freedom with spending money to go do the things you want to do too.
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