Bringing up a child is expensive and unless you’re one of the lucky ones amongst us a budget is going to prove invaluable…

The rules are pretty simple…Spend less than or equal to the amount of money that cones into the household. There’s no need for complex formulae, there is no need for overly complicated spreadsheets and most of all there’s no need to panic.

A budget can easily be drawn up on a piece of paper if you don’t like using spreadsheets so whatever your method either grab your mouse or your pen and we’ll get started.

4 simple steps to creating a budget

Step 1.

Put headings at the top of your page creating two columns. One for outgoings and one for incoming monies.

Step 2.

First we’ll deal with the incomings as this will probably be a shorter list. Make a note of all the cash that is generated into your accounts each month. A typical list may include salary from your employment, child benefit, tax credits and any other benefits. Remember to only include items that you receive on a regular basis. Don’t add in overtime if it is irregular and not guaranteed as basing your budget on probable numbers is dangerous to your financial health.

Step 3.

Okay, you’ve got a list of incoming monies, now for the outgoings. To start your list get the latest bank statement you can find and list all the items that you have leaving your account via direct debit and standing order on a monthly basis. This will normally cover your mortgage, phone bills, utility bills, council tax, water rates, home/car insurance, tv license and loans outstanding amongst one or two other items. Now we need to add in any other items that you will regularly incur that you may pay cash for. A few things that you’ll typically need to include are Top ups for Pay as you go phones, the household grocery bills, petrol/diesel expenses, an allowance for eating out/pub/cinema or whatever else you do on a regular basis, and any other items that you generally incur on a regular basis ( eg bus fares ).

Before we conclude the outgoings we now need to consider the cost of the annual items we may have to pay for that fall outside of our monthly cycle. For example, maybe every year you buy a season ticket to your favourite football team – We need to factor this into our calculation. Take the cost of all the annual items, divide them by 12 and add this value to your monthly outgoings total. On the assumption, in the example of the season ticket, that it is 12 months away from being purchased then this will work great. In reality though the season ticket may only be 4 months away so we will need to take the season ticket cost and divide by four in the initial budget. We can then review the this and divide the value by 12  in fours months – in essence we start saving for next years immediately after buying this years.

Step 4

Right then, we have all our income listed and we have all our costs listed. Now what? the answer is simple, take the outgoings away from the incoming and see what the number is.

If the number is zero then you’re on a tight budget with no room for manouvre so any emergency such as a need for a plumber and you may be in trouble.

If the number is positive then this is the value that you can either save for any unexpected expenditure or is money that you can use for something you thought you couldn’t afford. My advise though is that you should try to build up a comfortable positive number each month to ensure you have a little buffer in your budget avoiding financial stress.

If the number is negative then we have a problem. you are spending more than you are bringing in. This is obviously not good. You will need to do one of two things, reduce the outgoings or increase the income. A second job is a good way of increasing income but may not be possible depending on your circumstances, and i’m sure it’s not the solution of choice. The most plausible option usually is to reduce costs. How do we do this? Here are some ideas:

Cost saving ideas

Use a price comparison tool to ensure that you are getting the best prices for you gas, electricity, home insurance and car insurance.

To help you do this refer to our price comparison article by clicking the link below:

Superdads Price comparison article

If you have a Satellite/Cable package for your tv then only subscribe to the channels you watch. Sounds simple but many people pay extra for something that they don’t use. In addition, can you bundle together your line rental, broadband and telephone calls to make use of special offers.

When you’re doing your grocery shopping try out the cheaper brands such as the “Own” brands provided by Asda, Tesco, Morrisons etc.

Maybe you could switch your pay monthly mobile phone for a pay as you go alternative.

Fill your car up with fuel at your local supermarket where the fuel is generally a couple of pence cheaper per litre. 2p per litre doesn’t sound much but over a year it starts to accumulate into a reasonable sum.

Should you have any suggestions for cost savings that you’d like to share please feel free to post them.

Author: SuperDads

We’re here to make a difference. Superdads not only offers advice but we are her e to promote the importance of fatherhood. Many people are oblivious to the fact that Dads really do matter and this is something we’d like to put right.

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