Five Essential Budgeting Tips for Financial Success With PocketSmith

Managing your finances can sometimes feel like a never-ending task. As a Financial Adviser, helping a client with their budget is often a top priority for me, and PocketSmith is one of the tools we use daily to help clients achieve financial freedom.

Creating a budget and sticking to it is one of the first steps in taking control of your finances. You just need the right tools, strategies, and support.

My top five tips below are a great place to start, along with this podcast episode of Cheques and Balances: The Takeover — Budgeting 101 (also available on Spotify and Apple podcasts). Makayla Edwards-Russell and I discuss where to start with a budget, as well as our own bills and spending habits.

1. Automate EVERYTHING

Automation is a powerful tool for anyone looking to improve their financial health. By setting up automatic payments and categorization, you can work towards a goal with no admin required.

• Set up automatic payments to ensure that your bills are always paid on time and that you are consistently setting aside some savings. You could be building up an emergency fund or saving for specific goals like a holiday, house deposit or retirement.
• Make sure you are using PocketSmith’s Category Rules tool wisely to reduce the time spent on managing your money. It shouldn’t take more than five minutes a week!
• PocketSmith’s forecasting tool can help you visualize how these automated payments will look over time. It can show that you may need to adjust your budget, or it will keep you motivated and on track.

2. Plan for the one-offs

Whether it’s a new car, renos, or an unexpected vet bill, big expenses can disrupt your financial stability if you’re not prepared. Planning ahead for these expenses can help you avoid unnecessary debt and stay in control of your finances.

• Allow for the one-offs in your budget, using PocketSmith to set up an annual allowance for these costs. By breaking it down into manageable monthly savings, you can gradually build up the funds you need.
• If you have a big expense coming up, you may need to adjust your budget to accommodate it. This might mean cutting back on non-essential spending for a few months to ensure you can cover the cost.
• One-offs will always come up. Expect the unexpected!

3. Spring clean your providers and subscriptions

Set an annual calendar reminder to review and refresh your utility providers and subscriptions. Over time, we often accumulate subscriptions and services we no longer use or need.

• Check if you are getting the best rates for your utilities, such as electricity, gas, and internet. Compare different providers and consider switching if there are competitive alternatives.
• Look through your budget or transactions and identify subscriptions that you no longer use. Whether it’s a streaming service, magazine subscription, or gym membership, cancel anything that does not add value to your life.
• Don’t hesitate to ask your current providers for better rates. Often, a simple phone call can result in discounts or promotional rates.

4. Track your spending

Tracking your spending is essential for understanding where your money goes and identifying areas you may need to adjust. PocketSmith makes it easy to categorize your expenses and monitor your spending patterns.

• Set up categories for different types of expenses, such as groceries, dining out, transportation, and entertainment. This helps you see exactly where your money is going.
• Establish spending limits for each category based on your budget. PocketSmith will alert you if you’re approaching or exceeding these limits, helping you stay on track.
• Set aside some time in your calendar to review your spending at the end of each month. This will help you identify any problematic areas and adjust your budget accordingly.

5. Regularly review your budget

Your financial situation and goals can change over time, so it’s important to review and adjust your budget regularly to reflect these changes. PocketSmith’s flexible budgeting tools make this process easy.

• Set aside time each month to review your budget and make any necessary adjustments. This helps ensure that your budget remains aligned with your financial goals.
• In addition to monthly reviews, conduct a more comprehensive budget overhaul at least once a year. This is a good time to reassess your financial goals, review your spending habits, and make any significant changes to your budget.
• If you manage finances for your household, make sure to involve your partner in the budgeting process. This ensures that everyone is on the same page and working towards the same financial goals.

By implementing these tips and utilizing PocketSmith, you can take control of your finances and make informed decisions that will help you achieve your financial goals.

For more information or to book a meeting with a Financial Adviser from Lighthouse, please visit our website.

Jess is a Financial Adviser at Lighthouse and avid user of PocketSmith, helping individuals and families take control of their finances. With a passion for personal finance and a knack for simplifying complex client budgets, Jess writes to empower others on their journey to financial independence.