What are your financial goals for 2022? Perhaps saving for a sunny holiday or even a wedding? Or boosting retirement funds?
To achieve your goals and feel more in control of your money, it helps to have a budget. This is a financial plan that includes all your income and outgoings. It maps out how you want to spend and save. It’s also something that Starling app features could help with.
Calculating your income
It’s important to start with an accurate figure for your monthly income, after tax and any essential loan or credit repayments.
Calculate your average monthly income over the past year by dividing your annual income after tax by 12. If you’re not sure what you earn after tax, you can use an online calculator or simply add up all 12 months of previous income into your bank account.
If you’re self-employed, you may want to slightly underestimate your monthly income figure, as your income may not be totally predictable.
Looking at expenditure
Next, calculate your essential outgoings (e.g. rent, bills, groceries). It’s also a good idea to include a small buffer. Everyone’s life situation is different and you may need to add in extra lines for items such as childcare, education costs or care home fees.