To many people, budgeting can feel like a chore. The idea of planning your spending (and balancing that against your income) isn’t the most appealing of prospects at the best of times…

…so, what about when you’re struggling with debt?

Well, then it becomes even more of a daunting prospect.

When the money going out is greater than the money coming in, the easiest thing to do is to throw the budget out of the window altogether, but that just exacerbates the problem.

Budgeting doesn’t have to be scary. It can be a lifeline to people struggling with debt, and a preventative tool from even getting into debt in the first place.

There are so many ways to budget effectively, and as long as it’s clear to you what’s coming in and what’s going out, there isn’t really a wrong way to do it.

One popular method of budgeting is known as the 50/30/20 rule, although there are similar methods with different breakdowns of percentages.

Essentially, this method encourages you to split your incomings into percentages and to only spend each percentage on a designated outgoing or cost.

For instance, with this method, 50% of your after-tax income should go on things that you ‘must have’ or ‘must do’, things like rent or mortgage payments, utilities, and food shopping.

If 50% is too low to cover these costs, you just need to adjust the breakdown of percentages, let’s say 70/20/10.

Continuing with 50/30/20, the next 30% should go on things that you want to do, or want to buy.

The difference between ‘needs’ and ‘wants’ is important to consider when budgeting, and once again, this percentage can be tweaked according to your income and how frugal you want (or need) to be.

The remaining 20% should go towards savings and/ or debt repayments, but once again, it’s important to remember that the percentage of each section can be changed dependent on your circumstances.

For some people, this method goes far enough, but for others, getting really specific with your budgeting is an extension that helps with money worries even more. It can be time-consuming, but breaking down the percentages into smaller and smaller costs and outgoings can make a real difference.

How much per month on takeaways do you spend? How much per month on petrol or transport costs do you spend?

Getting creative with how you present your budget can help too. If Excel is your thing, create a spreadsheet that you can update as you move through the month. You could even use colourful post-it notes and felt tip pens if you’re feeling a little more arty!

At the end of the day, it might not be the most enjoyable thing to do each month, but spending some time on budgeting could well be the most beneficial thing you do each month.

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