Use our UK Finance guide and learn by experience. We outline pitfalls so that you don't have to learn the hard way, as many of us often do.
Sound Advice
Budget for a happy holiday
Everything's chosen and picked out and ready: you know where you're going and every step of your holiday trip has been planned. You're looking forward to a sunny holiday, working on your tan and cocktails in the breeze.
However all your plans could fall flat and have you coming home early if you don't budget properly for your holiday
Many people forget about putting together a budget. They don't set aside the right amount of money for gifts, food, entertainment and other expenses. If you want a holiday that you'll remember for a lifetime, its vital to plan properly and have a well thought out budget. Its important not to think about a budget a month before you leave. Save for the whole year. Put aside a little each month and by the time you actually go on your holiday you have a nice savings stored up and you can enjoy your holiday without having to be thrifty.
Even if you are generally good when it comes to spending money and you don't spend more than you earn, its still clever to have a budget. Know what money is coming in and how much you're spending. If you don't control these kinds of transactions it's easy for your money to disappear. A personal budget is also helpful for overcoming a debt problem and helps you to avoid getting into debt at a later stage.
Bad debt comes from living beyond your means. Good debt however is debt that is used well to improve your financial standing or standard of living. For example, good debt would be a debt incurred for an education or a mortgage for a new home.
Because of the varied lifestyles and habits of people, there's no one single way to get people into the habit of budgeting the money. However there are principals and guidelines that you should follow.
- List your take home pay (after deductions)
- Calculate regular monthly expenses (ie bond & car payments)
- List your variable expenses (ie food and transport costs)
- Foresee irregular expenses (ie vacations)
- Then deduct your expenses from your take home pay. If you're left with a negative amount then you need to cut back on your expenses. However ensure that you
- Pay fixed expenses with priority
- Save for the unexpected
- Put aside a little money
If you're still unsure about performing the above procedure on your own, then why not schedule a meeting with your financial advisor or bank consultant.
A budget will guarantee your ability to cover your needs and reach your goals.
