Brits worst savers in Europe? How to budget your expenses successfully

The process of maintaining a monthly budget is one of the most effective ways to keep track of your expenses, although it may seem a bit of a challenge for some. However, it does seem that Brits need a bit of extra help to save their pennies. According to The Future of Savings report, compiled by the Post Office and the Centre for Economics and Business Research, Britain has slipped behind both Spain and Italy in the savings table, sitting 11th. It found that Australians on average can save £5,000 more than Brits, who have little incentive to save.

So, why is this? One reason could be that The Bank of England bank rate has been stuck at a record low 0.5 per cent for more than five years, so Brits have been less tempted to save. There are also still some who feel they lack an adequate enough income to save. This is a misconception that needs to be addressed, as budgeting is one of the smartest ways to plan your expenditure over the month and also to trim expenses wherever possible. Even if you are living on unemployment benefits, it is always a good decision to budget.

Why should you budget?
The reason is simple - because if you do not plan your expenses there is a greater likelihood of you overspending on unnecessary things, which could result in you falling short of cash, just when you need it in a financial emergency. The last thing you need is to run short of money when you need it urgently!

Got no money right now?
Everyone has to start somewhere, most of us with nothing. Don't get into the trap of thinking there is no point in starting to save. If you haven't much savings, you can use short term solutions like a loan. If you have a sudden medical expense or a car problem, you might need a bridging solution until your next payday – hence the term payday loans. Heard of companies like like 'Wizzcash'? These companies provide short term loan solutions to tide you over until payday. Many people use this solution in times where there are no savings to fall back on. These can offer solutions in a crisis, but you shouldn't rely on these forever and you should always make sure you can repay them fully in the time frame. As you save more money, you can use this cash to cover your costs more competently.

Looking forwards
Most of us overspend without being actually aware, until we sit down and seriously analyse our spending habits. Maintaining a monthly budget will result in better financial management in the long term. You can draw up a list where you clearly itemise all necessary household expenses and calculate the money you will spend on essentials and other requirements for the family.

Maintaining a budgeting is not difficult once you develop a habit and you will see a positive change in your spending habits, which will also lead to greater savings in the long run. A few ways you can go about this are as follows:

Make a habit to itemise
The easiest way to keep track of your income and expenditure is by developing a log or diary where you maintain a record. Besides your regular income any other sort of financial gains should also be entered. Maintain two separate columns for your sources of income and the other for all sorts of expenses. This will give you a very clear picture at the end of the month as to how your money is being spent.

Maintain a file for receipts & vouchers
It may seem as a bit of a chore to some, but try to make a habit of maintaining a file where you can store all the receipts you get for your utility bills, mortgage and credit card payment bills, shopping at the grocery store, fuel bills etc. In short, do not dispose of any receipts you get in haste and keep them to be filed. At a convenient time you can go ahead and check them, which will be the most accurate way to gauge where most of your income is going. It gives you a precise idea of how and on what you spend your money and also aids in cutting down on frivolous expenses. Instead of spending money on a bite and a cup of coffee in the cafe you can have breakfast at home. You will be able to find areas where you can trim down on expenses.

Start a savings plan
If you do not already have a savings account, set up one. You can find ways to tweak your expenses on non-essential items which will go towards your savings. Whatever surplus money you have, develop a habit of saving it. You will be surprised to find a decent sum in your account within a few months. Having surplus money always stands you in good stead, especially when there is an unplanned emergency. With the rise in cost of living and with inflation, having extra money in hand is a necessity. You also need to have a decent amount of savings for your retirement phase of life. After all - we all want a comfortable and relaxed life in the twilight years.

The writer has been working for a financial advisory for the past decade and assists people to develop a personal financial management plan to better manage their finances.