The Third Budget Of The Year In Review

The start of a new month means it’s time to share the third budget of the year in review series, if you are new here, for 2021 I decided to share a budget review every single month on the blog. I love budgeting and have been budgeting for as long as I can remember and over the last couple of years I have enjoyed helping family members and a few of my friends learn how to budget their money. I practice what is called a zero-budget (meaning my income minus expenditure equals zero) as well as the budget by pay check method (I budget based on my expected pay check for the month).

As we start the month of April, I am excited to begin this new month and new quarter on a positive note, I am completely debt free, I mean I have been debt free for the last 4 years except for my mortgage. Over the last few days I was deliberating whether I should raid my sinking funds and pay off my car or just keep making monthly payments until November. I opted for the former and paid off just under £9000 and earlier in the month I paid off my Klarna loan which meant the only two debt items I had have been completely paid off. This was only possible because I budget and I am a diligent saver especially when I have a goal to accomplish.

*Disclaimer: I am not a financial advisor, what I am sharing is from my personal experience.

The Third Budget Of The Year In Review

At the start of every new month, I sit down and write out my budget based on my fixed expected and then surmising what I think my variable expenditures might be. For as long as I can remember I have made a conscious decision to ensure that I always have buffer money in my account so that when I get surprise bills I am not thrown off into a negative balance. Depending on your income, you should aim to have enough money to cover your rent/mortgage and a couple of bills if they were charged early.

Before I got my finances in order, I always used to receive ‘surprise bills’ every single month and in all honesty they were not surprise bills but more that I didn’t think about them since I didn’t have a written down budget. There are a lot of people who don’t have budgets which for me sounds crazy because I love instructing my money where it needs to go and not it surprising me every single month by going where I don’t want it to go. Budgeting affords me a peace of mind of knowing, I know how much income I will have, what expenditures I have and how much I will be allocating to my savings.

When I was closing my March 2021 budget, it got me thinking about the majority of people I speak to about budgeting who tell me they save what is left over (if anything). This is not the best way to save for anything and it will take you forever to save even a £1000 because you are letting your money tell you where it is going not the other way round. Personally when it comes to my savings, I pay myself first which means, the first auto-deposit that I have as soon as I get paid is straight to my savings account. Budgeting allowed me to know what my essential bills were, how much I could afford to save every single month and how much fun money I will have.

The third budget of the year in review is juicer than the January budget where I had to pay £5000 in tax because someone messed up my taxes last year. For the February budget, the juice use was that I was able to put aside into my savings over 50% of my total income for that month. This is not something that has happened before nor did I think I would reach a point in my life where I would spend 50% of my income on expenditures and 50+% will be added to my savings. Being debt free is a great feeling and now that I don’t have debt to focus on I income my tithe and giving from £100 to £400 a month, as a Christian this is very important to me.

In case you missed the money content I shared in March and are interested in a recap then see below

• Why you should know your net worth – I shared 3 reasons why it is important to know your net worth and its not something for reach people for for average joes like us as well. Calculating your net worth is very easy, its total assets minus total debt. I calculate mine quarterly and I already know that my net worth is over £250,000.
• How to set financial goals – I am a dreamer by nature as well as a planner so I love planning things including my finances. I know what I would love to achieve this year and I am working towards ensuring that I accomplish those goals.
• How to prepare for tax season – I am due to submit my taxes after Easter, this is the first time I am this prepared since I started paying taxes for this blog. I want to stay on top of my taxes and make sure if I have anything to pay I do that now that wait for a surprise £5k bill like what happened in January.
• Learn how to manage your finances – this is another important topic that I shared on money based on feedback I received from a few friends who are still struggling with managing their finances.
• Should you save money when you are in debt – this topic is one that I think we should discuss more often. I personally think it depends on the type of debt you have, for example the only debt I have is my mortgage so I do save but if you had a lot of consumer debt, I would put a small emergency fund in place and then just focus on paying off your debt.
• Important expenses that are often missed on budget trackers – I know for sure that I don’t have a gifts fund because I put that under miscellaneous and a few other bits fall under that category for me but things like medication should not be miscellaneous.

And there you have it, the third budget of the year in review to close out March and quarter one and start out April on a lighter note. I am excited to see what other financial goals I will be able to accomplish in the next three months. Have you done your March budget yet? Don’t forget to check out my March-2021 budget close-out video as well.