A budget is a plan for your finances, balancing income and expenses. There are two main components:

  1. Income: money coming in.
  2. Expenditures: money going out. 

When income exceeds expenses, you have a balanced budget, leaving money for additional needs, wants, or savings.

Reasons to Budget:

  1. Gain control over your money
  2. Understand spending habits and identify areas to cut back
  3. Save for future goals
  4. Enhance financial security
  5. Increase confidence and overall wellbeing

Budgeting and Wellbeing:

  • Inflation is the rise in prices of goods and services. The Bank of England aims to keep inflation at 2%.
  • After a period of high inflation, rates returned to 2% in July 2024.
  • Rising inflation can be stressful, but it changes over time.
  • Adjusting your budget by reconsidering needs versus wants can help manage financial pressures.
  • There are various advisory services available for families facing financial difficulties.