Many people are under the impression that budgeting doesn’t not and cannot work well. That is because some people are simply not taking everything into consideration when drawing them up. Yes, you have thought out your monthly expenses as standard, but what about things like your daily coffee or a weekend away?

A budget should be very unique to you and your incomings and out-goings. In this guide, we are going to look at blanket rules about how to best budget your monthly expenses to help you control your cash flow.

Why should you budget?

Let’s start at the very beginning, why do you really need to budget? Well, if a budget is done correctly it can be used as a useful tool to analyse your finances and help you to make wise decisions with your money. It is also aid in answering the following questions:

  1. Do I spend more than I earn?

If you are seemingly dipping into your saving account or relying far too much on using your credit card only to pay back the minimum each month, this may answer your question. Having a budget in place is vital in working out the source of the problem. Why are you spending so much? And on what?

As you are probably very aware, overspending can lead to spiralling debt and long-term financial turmoil. Which is why it is good to have a budget in place which can prevent overspending and then longer-term effects.

  1. What can I afford to spend?

The second question is can help to answer is how much can you really afford to be spending as you may be spending well over what is realistic for you at present with the help of a payday loan and or credit cards. Whilst there is nothing wrong with taking out loans or using a credit card if fact there are significant benefits in doing so, you should not be relying on this month to month.

Once you have identified what you are spending and on what, you are able to start to alter and prioritise where your money goes to so it can stick within your means. A budget can help you work out what your means are and how to stick within them.

Create a spreadsheet


One of the easiest ways to format your budget is on a spreadsheet. To make it even easier, there are free budgeting spreadsheets which are already been created for you to input your own details.

This might take a few hours to sort out if you want to do it well. However, do not let that put you off before you have even started. Think of it as a vital time to put aside to discover where you are going wrong potentially and something which will benefit you in the long run, especially if you are saving up to make a big purchase like a car or a house.

You should input things like your utility bills, rent (if you are not a homeowner), mortgage (if you have one), standing orders and an average of your weekly food bill. You can work out how much you are paying on food by referring to your last few food bills and making a rounded average.

Download a budgeting app


In the digital world, we have tools right at our fingertips to help with almost every aspect of our lives. Luckily for you, budgeting is one of these things.

There are plenty of apps on the market which help you to track your spending and save you heaps of money. To look at an example, let’s take the app “Mint”. Mint allows you to track and manage your money all in one place. The app works by automatically categorising transactions made from linked debit and credit cards so you can see what sort of things you are spending your money on. You might be overspending on eating out, in retail shops or on your food bill.

There are plenty of apps for you to check out. Some are free and more basic and some are paid but have more features, of course. Spend some time shopping around and deciding which one may work for you best. Some simply help you structure your budget, whilst others provide a service like every time you spend, the app will round it up to the nearest pound and put what is left into a savings account.

Budgeting Loans

There are actually things called ‘budgeting loans‘ or crisis loans offered by the government, these are typically available to those who are on benefits for at least 6 months. They are designed to help with things such as furniture, household items, rent, travelling costs and funeral costs – basically life’s essential things.

If you do feel like you need a bit of extra help to get back on your feet, we offer payday loans here on payday bad credit, even to those who have found themselves with a not-so-desirable credit score. You should only apply for a loan if you know you are within your means to pay it back by the agreed date.

Daniel is a loans expert based in London and has been working in the payday loans industry since 2010.