Easy budgeting tips to help you save quickly and easily

Budgeting doesn’t have to be difficult. Here are some easy tips to help get started.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Let’s face it, budgeting doesn’t come easy to everyone.

In fact, a lot of us, myself included, spend much of our time clawing back from blowouts and bad spending binges all year round. Whether it’s clothes, eating out, or socialising with friends, I often struggle to say ‘no’ and sometimes will find almost any excuse to part with my hard-earned cash.

At some point, though, we all have to recognise that to stay afloat and keep doing the things we enjoy, we have to start moderating and following some sort of budget or risk losing our homes, cars and more.

We all save for different reasons, and it’s not always because we’re skint. Sometimes, we budget to go on holiday or to make a much-wanted purchase, like a car or games console. Whatever the reason, there are plenty of budgeting apps and easy budgeting tips that can improve our efforts and attitudes towards saving. Admittedly, these methods aren’t for everyone, but there are some tips we can all follow to save quickly and easily. 

Here are four easy budgeting tips for creating a money-saving plan that sticks. 

1. The 50-20-30 rule 

The 50-20-30 rule was recently popularised by American politician Elizabeth Warren and proves an effective budgeting method having made its way from overseas. The rule requires us to divide our expenses into three categories: wants, needs, and savings.

The largest portion obviously goes towards the essentials, like basic utilities and keeping a roof over your head. The 20% is committed to savings and clearing any tedious debts. The things we want, typically eating out, on-demand subscriptions, and trips to other cities, fall under the 30% bracket, though this might seem surprising.

The key to successful budgeting isn’t just making a plan for saving and sticking to it. Staying motivated for budgeting won’t last if we don’t allow ourselves to continue doing what we enjoy, even in moderation.

That isn’t to say budgeting can’t be adapted, but this structure provides a good opportunity for both short and long-term saving and helps us to recognise the right areas for saving responsibly. While I can attest to the success of the 50-20-30 rule, it only works well when you’re monitoring every little expense.

2. Paying debt is an important part of successful budgeting

Paying off what we owe on credit cards and bank loans are surefire methods for taking back financial control. Debt will never go away. It will continue to get in the way of your budgeting plans, slowing down progress towards financial goals.

If paying debt was simple, we’d all be free of it and wouldn’t need to budget in the first place. Factoring debts into a budget is the most affordable and effective way of clearing them.

Being free from debt allows us to focus on the more wholesome things in life, like saving up to start a family or finally putting a foot on the property ladder.

Trust me (from experience) that ignoring debt typically leads to the worst outcome. The reality is that most debtors are prepared to establish a repayment plan that’s mutually beneficial. By facing debt head-on, you’re way more likely to be eligible for alternative and personalised repayment options, rather than suffering with debt in silence.

3. Keep an eye on every expense 

It’s typically the small expenses that sting us. It could be the morning coffee on the way to work or the sandwich we get every day for lunch. These are usually the areas that we slowly bleed money and could easily save on with homemade alternatives. As my Nan always says, “Look after the pennies and the pounds will look after themselves.”

Let’s be honest, not buying that £2 coffee before work every morning saves a tenner a week. That’s at least £40 a month, and that’s money we could all do with leading up to payday. Replacing some expenses is easier than with others but even the most minor adjustments to frequent spending can have a huge impact on saving.

4. Budget accordingly 

Drastic changes can’t always be made overnight. Even minor reductions to spending can have a significant impact on saving. But an on-the-spot decision to cut all outgoings almost entirely is unlikely to breed tangible results.

In order for a budget to be successful, we should make adjustments that are realistic and personalised to our circumstances. Our earnings, fixed costs, and levels of overspending are different, so a personalised strategy will always be the most effective.

Making achievable targets and not depriving ourselves of too many of the pleasures that money provides us makes it easier to stay motivated and create actual savings. A budget that’s in line with the things we enjoy is easier to stick to than a routine we hate.

This reminds me a lot like my experience with dieting… 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the FCA, and we are permitted in this capacity to act as a credit-broker, not a lender, for consumer credit products (our FRN is 422737). The Motley Fool Ltd does not have permissions for, and does not advise on, investment products and services, but may provide information on investment products and services.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »