21st – 27th March 2022
Simply, a budget is a plan for managing your money and helps you plan for the future.
A well-planned budget is important for you, it will help you to organise the money coming in (your income) and the money going out (your expenditure). The part about a budget is that it will help you to plan for bills, unexpected expenses and to save for special events, such as, going to college. You can create a weekly, monthly or yearly budget.
So, what is the benefit of creating a budget?
- Gives you better idea of your money in (Income) and money out (expenditure) over a certain timeframe.
- Ensures you are in control and not over spending.
- Ensures you have a good relationship with and a positive attitude towards money.
- Helps you to make sure that you are getting the most out of your money.
If your budget is going to work; your spending should be less than or equal to your income.
If you’re spending more than the income you have, it is a good idea to review what you are spending on and see if there are any changes you can make. Sometimes it’s hard to remember what you have spent your money on.
Top tip: Keeping track of what you spend each day, week or mon. This can help you decide on what you really need in your budget and what you can get rid of.
Using a spending diary can help. You can use a pen and piece of paper, or MABS have an app on Android and IOS, to help you keep track. You can also check out our MABS Budgeting Tool. This tool will calculate your figures and show income and expenditure in weekly, monthly and yearly amounts. You can save it and make changes as needed.
But remember, a well balanced budget should include some treats and things to look forward to! A budget is a tool, not a punishment.
Let’s take a look at a Budgeting Case Study…Meet Dara!
- Dara is sixteen
- Lives about three miles outside a small town in the midlands.
- In Transition Year in the local school
- Travels to and from school each day by bus (his mam pays for the ticket).
- Helps his parents on their busy farm.
- They pay him €30 per week and he does not have another part-time job.
- His parents are always helpful when Dara needs money for school or for clothes. If he wants to go out with his friends, buy games or phone credit, he has to pay for this himself.
So, does Dara budget or save his money?
Each week he tries to put whatever he has left in his pocket into a jar in his room. The jar is filling up but Dara is not sure where the best place to save would be. He has about €50 saved in the jar.
What are his costs?
- A night out at the cinema usually costs: €9
- Weekly film magazine on order from the local newsagent costs: €4.50 per week
- Lunch from the chipper once a week costs: €3
- Phone Credit once a month costs: €20
- Xbox games once a month costs: €15
- Film Festival ticket (once off purchase) costs: €100
What’s the dilemma?
Dara doesn’t know if he can save up as much as €100 because he spends most of his money every week. He also has to buy a nice birthday present for his Mam who is turning 50.
Get thinking! Ask yourself these questions & help solve Dara’s budgeting dilemma…
- Will Dara be able to save for the ticket from money he will earn in the next two months, or will he have to use the €50 in his savings jar?
- Can you create a budget that will help Dara attend the Film Festival?
- Do you think he will be able to stick to this budget?
- What would you suggest to make things easier for him?
- Do you think Dara’s savings jar is a good idea?
- Would you suggest a better option for Dara to save his money?
Don’t forget to check out our previous blog on Needs vs Wants and take a look at our next blog for top Savings tips!
For more information on Global Money Week (GMW), please visit the official GMW website.