Sara Benwell is consultant editor of Pensions Insight and writes for The Sun, The Mirror and Pensions Age. She's had a personal finance column in Best and was consumer editor at Good Housekeeping.
Now, Sara is sharing her knowledge with RetireWise, and she starts with some excellent advice for everyone.
Budgets are brilliant. They help you live within your means and not go short or run up debt. Here’s how to build a budget that works.
First, write down exactly how much money you have coming in every month; pensions, benefits, earnings from work or things such as rent from a lodger.
Then look at spending. Start with the essentials, your mortgage if you have one, and council tax. Next come bills. Make sure you’re getting a good deal. Switching providers could save you thousands each year.
Make sure you include everything, no matter how small. Loans, MOTs, memberships and insurance all need to be budgeted for.
Deduct your total payments from your income. You can start thinking about savings and spending money with what’s left.
Have different savings pots that are jointly for a short-term want and a long-term goal, such as a restaurants and holiday fund that you put something into each month. Then, if you decide to go out for dinner, you’ll have to decide if you really want to take money away from your holiday.
Once you’ve put aside savings, what’s left is spending money. Divide it by four to create a weekly budget, then plan your grocery shopping. Set a spending limit and shop around.
Whatever remains you can spend as you choose. Do make sure you treat yourself occasionally.
Budgeting doesn’t mean no spending or no fun. It’s working out what you can spend so your fun doesn’t turn into a nasty financial hangover.