You need a plan to achieve your goals. A budget is part of your strategy to achieve your goals. Like it or not, whatever you want to do in your life you will need money at one point. The way you plan to allocate your money (or the lack of planning) tells a lot about you. Let’s consider what you need to consider for your budget at each stage of your life.
The student budget
Starting university or college is often the time when people feel the need to monitor their money. Generally, students have limited resources and struggle to make ends meet. They may not have a formal budget but they keep their focus on not spending too much. Limiting expenses is great but makes no sense if you don’t track where you spend. They would surely benefit from drawing a more structured budget especially if they don’t have money to waste. Realizing that you spend a lot on eating out can drive you into changing your habits and making plans to use your wallet more efficiently. This not only helps saving money but also helps managing your level of stress!
The single young worker budget
Did you feel overwhelmed when you received your first paycheck? Do you remember what you did with it? People who invest time in budgeting can end up richer compared to those who have a better income and splurge. The first salary doesn’t often give a lot of flexibility but budgeting is always the right strategy. You may feel jealous of people who party 3 times a week but you’ll feel luckier finishing paying off your student loan. You may choose to continue living with your family in order to save for a flat deposit or to build your own savings. At this stage, too few people really think about what they want to do with their money and what their life goals are. It is never too early to start thinking about money and to learn. It is also much easier to recover from a financial mistake early in life. Start educating yourself about investment and start building and managing an emergency fund, just in case.
The young people budget
Another big budgeting revolution. It was already hard to set a budget on your own but now that you have a partner you need to consider a few things. Avoiding the money question can be quite dangerous for your relationship.How do you split spending? Will you open a joint account? If you want to spend your life together, shouldn’t you start saving towards a home deposit? All these questions need to be addressed so you’re sure you’re both looking in the same direction.
The mid age budget
Thanks to your hard work, you may have a better salary compared to the beginning of your career. That’s great but you have more things to consider for your budget. What about retirement? How much do you think you will need and what type of lifestyle will you have? You may also have started a family. Now your budget needs to include more people and some of them are totally dependent on you. You may need to review your saving tactics and investment at this stage. It’s now crucial to do long term budgeting and consider saving for your child’s education while still making sure you still have enough cash available just in case something happens.
The later age budget
If you have been budgeting and planning thoroughly from a young age, you shouldn’t be in too much trouble. One big change to consider is the impact of healthcare costs on your budget. This is a big challenge and a serious thing to consider as you get older. How will you finance the healthcare costs when you become dependent? Make sure you can afford a decent life standard that you feel comfortable with.
This blog post simplifies things a lot but tries to raise important issues related to budget. Budgeting can seem daunting but by planning and forecasting actually gives you more control and the freedom to make the choices in your life. If you’re new to budgeting check this blog post to get you started!