It is really important to make sure that you set a budget if you are finding it hard to manage your money. You need to be in control of your spending so that you are sure that you will not overspend and get into debt or not have enough money to pay your essentials. There are some simple steps that you can follow to set yourself a budget though and therefore protect yourself from being in this situation.

• Know how much income you have – it is important to start by making sure that you are aware of how much money you have coming in each month. This could be made up of a number of things. You may earn money and have a salary but also you could have other income such as interest, return form investments, pensions, benefits and other things. Only include things that you always get as an income rather than ad hoc income such as dividends from shares which you may or may not get.  It is better to assume you will get less and then if you do get extra this will be a bonus. You may need to look back over statements form your checking account in order to do this.
• Differentiate between necessary and luxury spending – the next thing to do is to put together a list of all of the things that you normally pay for. Again, use your statements to help you and write down everything that you have bought over the last six months. This will take some time but you will soon start to see patterns and things that you buy regularly. To use this many months means that you will be able to include things that you do not pay for that often such as things you pay quarterly or six monthly. Do be careful to also include anything that you pay yearly. Once you have done this then you can split them into necessities and luxuries. This can be quite difficult, but think to yourself honestly about what you can manage without and what you cannot. For some people just rent, food and heat are necessities but for others they will need money for their children, they will want to buy gifts, make charity donations and run a car. Be honest with yourself about whether you really need the things or not or whether you can have less of them or spend less on them.
• Calculate what money is left for luxuries after buying necessities – at this point you should have a record of how much income you have in a month and how much you need for necessities. Hopefully you will still have some money left which you will then be able to use to pay for luxuries that you would like. Of course, you might want to use the money to pay off any debts that you have and to put some money into a savings account. You may want to split the money three ways or just use it for one of these purposes. It is worth deciding at this stage. At this point you will then be able to set your budget. You will know what money you will allocate to spending on what and this is something that you should set up so that you feel happy and not stressed at being able to follow.
• Keep a written record – it is well worth keeping a written record of everything. Not only of what you have discovered but also write down what you intend to do in the future i.e. how much you want to spend on necessities and how much on luxuries plus any goals for saving or repaying debt. Then you need to keep a written record each month of what you are spending and what money you have coming in so that you can make sure that you are never spending more than you can afford. It is important to do this because each month is never the same. Some people will be paid different amounts depending on how many days there are in the month. Some will have expenses some months and not others, so you need to see exactly how much you are spending to make sure that you are aware of your financial situation at all times.
• Constantly check bank account – you also need to keep a constant check on your checking account. You need to make sure that the transactions are going through as expected and that there are not any unexpected ones that you may need to be aware of or payday loans online being taken out. If a large chunk of money comes out, for example, you will have to change your spending pattern for the rest of the month in order to allow for this. This means that although you have set a budget and you know what you will be allowed to spend, you will need to remain flexible.

Many of us spend more money than we can afford or just buy more things than we really need. This can lead to debt in some cases and in other cases it can lead to us not saving as much money as we otherwise could. Buying lots of things that we do not need can also to waste in that we have items we do not use and this is not good for the environment or our bank balance. Therefore, it can be good to find ways to avoid overspending and this can benefit you in a lot of ways.

Pay less for what you buy
It is important to make sure that you are not paying more than necessary for what you are buying. Obviously if you forgo quality on items then it may mean that you need to replace them more often and so it is important to think about value for money rather than just cost. However, there are many things that we buy where we pay more than necessary. This includes things like insurance, banking services and utility bills, where we will often just stick with the same company for a long time. By comparing prices of what other companies are offering you could find that you could save a significant amount of money. Also, by comparing prices when you are shopping, you could find that you will be able to get the same quality for less money for some of the things that you are buying. Try to go to cheaper retailers and look at whether their products look equivalent to the ones that you are currently buying. You can compare prices online so that you do not have to pay to travel to lots of different stores to compare prices. This should help you to be able to decide where the best place is to shop before you go.

Only buy what is necessary
We all like to treat ourselves every so often but if this gets out of hand then we can end up spending a lot more money than we can afford or buying so many things that we do not have the time to enjoy them all. This is when it can be sensible to start asking ourselves whether we really need everything that we are buying. Think about whether you really need the item and when you will be using it. Ask yourself whether you need it now, whether you could wit and buy it later or whether you do not really need it at all. If you avoid going into stores unless you know you need something form them, then this will help to reduce the temptation to buy form them. This applies to online stores as well, so if you get emails from stores then do not open them as you will be tempted to take advantage of offers or things like that and will normally end up buying things that you do not actually need.

Save some money
If you put some money aside when you get paid into a savings account then there will be less money available for you to spend. You will be able to use this to buy things if you really need them but otherwise it will just build up to help you out when you need it. It can be wise to set up a direct debit for this money to go out and then you do not have to remember to do it. You will need to be careful though, make sure that you check your checking account balance regularly when you want to spend money to make sure that there is enough in there so that you do not go overdrawn.

Set a budget
It can be wise to set yourself a budget for buying treats. Then you will not feel like you are missing out, but you will not overspend. To do this you will need to be aware of how much money you normally spend on essentials such as food and rent. Then you will be able to calculate how much you have left. Remember to take away the amount that you are saving each month and then you will have some money left you can use to treat yourself. You will need to think carefully about how you want to use this money and whether you want to spend it each month or if you would rather accumulate a few months’ worth of money to treat yourself to something more expensive.

By keeping a closer watch on your finances, buying the necessities first and setting a budget for treating yourself, you should be able to make sure that you are not overspending. Then by comparing prices on everything that you are buying, you will be able to make sure that you are never spending more than necessary on specific items. This should help you to have less clutter, be more environmentally friendly and manage your finances.