Budgeting
Budgeting is one of the most important skills you can develop as you move into adulthood especially if this is your first time living away from home or being fully responsible for your own finances.
Creating a budget helps you track your income and expenses, ensuring you don’t fall behind on payments and stay financially stable. It also helps you plan for the future and avoid unnecessary stress.
Benefits of Budgeting for Young People:
- Financial Independence: Learning to budget allows you to take full control of your finances. By understanding how to manage your money, you can make informed decisions and rely less on others for financial support.
- Avoiding Debt: A well thought out budget helps you prioritise essential expenses, such as rent, bills, and groceries, while limiting overspending on non-essentials. This can prevent the build-up of debt, especially from credit cards or loans.
- Building Savings: Budgeting allows you to allocate part of your income to savings, helping you plan for future goals, like buying a car, traveling, or building an emergency fund. Saving regularly, even in small amounts, is easier when it’s part of your budget.
- Reducing Stress: Knowing exactly where your money is going can reduce the anxiety that comes with uncertainty around finances. A clear budget gives you peace of mind, knowing you can cover all necessary costs and handle unexpected expenses.
- Achieving Financial Goals: Whether it’s saving for something specific, like a new phone or a holiday, or simply making it through the month without overspending, a budget helps you set and achieve realistic financial goals.
How to Start Budgeting:
Before working out your budget, you need to decide the following:
- What period does the budget cover? For example, is it just for term-time or does it include holidays as well?
- Is the budget weekly or monthly? Choose the format that works best for how often you receive income, such as student loans, wages, or allowances.
Below is an example of a budget template you can use to keep track of your spending!
By sticking to a budget, you’ll not only manage your money more effectively but also gain confidence in handling your financial responsibilities.
Our free budgeting template can be found here: Money map | Citizens Advice Scotland
