A unique budget idea

Budgeting is a great way to manage your finances and keep them under control. It helps people have more money to spend from each paycheck. Here is one strategy to budget your money effectively.

 One way to budget that can help you get control of your finances is to use the 10% method. Here’s how it works:

 First, write down all of your after tax household income (that is, the money you take home that you can convert into cash). Add it up into one figure. Now divide that figure by 10. You now have an amount that is ten percent of what you make.

 Next, get a paper and write down ten columns. These are “expense units.” Essentially you’ll be applying one of the ten percent amounts that you make into each column. So what should go into each column? Ultimately, that’s something that only you can decide, but here are some suggestions:

 In one column you’ll want to put 10% away in savings. This is something you should be doing for emergencies or for retirement. Starting now to save for retirement is the smartest choice you can make.

 In one column you’ll want to put 10% away for “pleasantries and emergencies.” In this column, you’ll be able to spend freely on whatever you want… or if there’s an emergency, you should spend it on that.

 You may have to apply two units to your mortgage and perhaps two or three units to your bills.

 As you go along, set aside each expense unit. At the end, you will find that rarely will there be any units left over. If there is, great! If your expenses do not match up and you require more units, then you’ll need to investigate to see if you can increase your income or decrease your expense units.

 One of the ways you can do this is to use a UK secured loan to consolidate your bills under one umbrella. It may not reduce what you owe, but it will reduce what you spend on interest each month. And you can also use the same kind of loan to increase your income by working on your home and increasing its value so when the time comes to sell, you’ll have made more money!