Whether you're trying to save some extra cash to buy your first home, go on holiday or for a rainy day, saving can be hard. 

With reminders that you need to cut back on spending and instead need to put it away, knowing where to start can be a big struggle for many. 

But there is one way that can make it easier, as budgeting can be a really helpful way that makes saving easy and quick. 

Learning how to budget is a great way to meet your financial goal, get out of debt or save for a mortgage, so you know how to start, we've put together a handy beginners guide. 

Using information for the savvy savers at Which? the guide will help you budget and save big. 

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How to budget: A beginners guide

1. Take your time and organise

Like any major plan you set out for yourself, you should take time to plan and create your budget. 

But before you plan you should gather a few helpful documents, such as: 

  • Few months worth of bank statements
  • Recent credit card bills
  • Copies of your household bills
  • Details of your savings and pension contributions
  • Information on any other income you may have

This paperwork will help you work out what essentials you spend on allowing you to work out the average money left over. 

2. Work out your income

Find out what your regular earnings are after any tax, pension or loan payments have been deducted.

Then you can add other sources of income such as savings investments or extra ways you get money. 

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You then calculate the amount you've earned in the last three months and work out the average giving you a rough idea of what to expect to earn in the coming months. 

3. Work out your essential spending

After working out your income, you should calculate how much you spend on essential spending. 

To make it easier you can categorise the payments to let you have a good idea of where the cash is going.

The best way to find payments is to look at household bills or direct payments via your bank. 

Once you've worked out your spending, you can subtract the amount from your monthly earnings, showing you how much is typically left for your leisure.

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4. Check your disposable income

Next, find out what you spend your disposable income on and how much of it you use. 

This will let you work out if you are under or over-budgeting in certain areas of your plan. 

You can work out how much you use by looking at your disposable income over the last three months and working out the average of what's left over to put away next month. 

5. Create a budget that you can stick to

Now that you've gathered all you need to make a budget you can stick to, you should be able to create a quick and easy monthly plan that you can stick to. 

Just use your average earnings, essential spending, and disposable income from the last three months along with one-off payments and you should be able to create a reasonable budget that will help you achieve your saving goals.

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This year has seen a whole host of household price increases — from the energy price cap rise to surging inflation and food prices — costing your family hundreds or even thousands of pounds extra per year.

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The worldwide energy crisis exacerbated by the Ukraine invasion, the financial impact of the Covid pandemic, record inflation figures and a surge in the cost of goods, fuel and travel means we will all feel the pinch.

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