How to manage your money without a strict budget

Personal finance is a complicated thing for many people. There’s no one-size-fits-all strategy to getting control of your money, as everyone has different expenses and priorities to think about. Additionally, while some people will work well when they’re given the structure and restrictions of a strict budget, others will feel overwhelmed by the idea of counting every penny.

If you’re the kind of person who rails against the idea of living life on a budget, don’t panic. There are still things that you can do to improve your money management strategies without committing yourself to a consistent budget. Here are some of our top tips.

1. Know the basics of what you earn

Even without a budget that’s set in stone, it’s a good idea to understand how much you generally earn, and how much you spend each day, week or month. This will help you to see basically how much cash you have to spend at the end of each month when all of your bills are dealt with. Take into consideration any extra expenses that you’re going to need to save up for over time – such as television licenses or birthday parties for the kids too.

You don’t have to count every penny here but remember to keep an eye on what you’re spending from time to time to avoid going too far over your budget. You can always try downloading an app that will keep you up-to-date on your available balance to help you.

2. Become a deal hunter

Anyone can benefit from becoming better at deal hunting – whether they have a strict budget or not. If you approach every expense on your monthly list with a mentality that pushes you to constantly seek out something cheaper, then you’ll be sure to end up with better offers overall.

The good news is that you can compare prices on virtually everything these days – not just big-ticket items like cars and televisions. You can also look for better deals on your car insurance, your loans, and more. Comparison websites will let you track down the best deals for whatever you need so that you can haggle on your monthly expenses. Even if you need cash in an emergency, it’s always better to compare options.

3. Use the tools available to you

Speaking of making the most of your time on the internet with comparison websites, there are various other tools that you can use to improve your spending habits too. For instance, most smartphones will have access to a range of applications today that can help with things like calculating your daily personal budget or figuring out how much you can afford to invest into your future retirement strategy.

Get online and find out whether any of the latest spending apps or financial tracking tools could help you to gain more control over the way you use your money, without making you feel overly restricted.

4. Take a closer look at your statements

You could be surprised by how much money you spend each month on things that you forget all about. In an age of subscriptions and easy digital purchases, we often forget where our money is going until we sit down and take a close look at our bank statements. Examine all of your outgoing costs over the last month and ask yourself whether you’re happy with where your money is going. If you discover, for instance, that you’re spending £25 a month on a gym membership that you never use, then you might decide that it’s time to get rid of that expense and commit to working out at home instead.

You don’t have to examine your statements every month, but you should be evaluating what you’re spending at least every three months, so you don’t lose track of where your money is going.

5. Separate spending from saving

Finally, it’s difficult to stop yourself from spending money when it’s in your current account, so make your life a little easier and separate the cash you want to save from the money that you’re comfortable spending. This will mean that you don’t have to constantly refer to a budget every time you want to find out whether you can afford a takeaway, or a night out with your friends.

Instead, you can simply look at your bank account and how much money you have left to use, knowing that your bills and your savings have already been dealt with. Don’t forget to set up automatic payments through direct-debits to your savings account too.

Photograph by FirmBee

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