When it comes to setting a budget, there’s only one ‘hack’ that really works

There are always new tips and tricks about how to manage your cash more effectively, writes money expert Talia Loderick. But the best budget is the one you actually use

It doesn’t really matter what form your budget takes, so long as it works for you (Getty Images/iStockphoto)

“Talia, what’s the best budgeting app?” It’s a question I’m often asked, especially this summer as people try to make their money stretch to cover the holiday period.

My answer is often unexpected: “There isn’t one.”

In a fast-paced world where we’re time-poor and seeking quick wins, money tips, tricks and hacks seemingly meet a need. But for budgeting to work – and I mean really work – it takes time and effort.

I know, I know. You want to hear that if you find the right app it’ll take you just five or 10 minutes to plug in your numbers and get a result. Unfortunately, that’s not how it works.

The thing about budgeting is it’s simple (money in less money out for set period of time) – but “simple” doesn’t necessarily mean easy to implement.

Don’t get me wrong, I’m a fan of some so-called “hacks”. The TikTok trend of “loud budgeting” is a fun one. It’s all about being honest with friends when you say no to anything you can’t – or choose not to – afford. In a world full of options, temptations and other people’s expectations on how you should spend your cash, it can be a great way to advocate for yourself and your money.

Similarly, what’s not to like about zero-based budgeting, where you give every pound a job? It’s a great way of being intentional with your money. Because another term for budgeting is “spending plan”. And it’s easier to say yes to the things that matter and no to the things that don’t if you make a plan for your money.

The 50-30-20 budgeting method worked really well for one of my coaching clients, who is self-employed with multiple sources of income. Here, you allocate 50 per cent of your income to cover essential spending such as rent/mortgage and bills; 30 per cent to cover lifestyle spending including socialising; and 20 per cent to cover savings and investing.

But effective budgeting takes real dedication.

It takes time – typically an hour or two or sometimes more in the first instance – to put together the relevant figures. It can be a slog, and sometimes it can feel like you’re doing it wrong – after all, surely this kind of thing should only take five or 10 minutes?

The good news, though, is that once you have it down, it will take less and less time – maybe you’ll eventually be able to get it down to that mythical five or 10!

It doesn’t really matter what form your budget takes – it can be an app, a spreadsheet, an online planner, a pen and paper, and yes, an app. Really anything that helps them gain the clarity needed to take control of their finances.

A budget is a forward-planning tool. Done in advance, it will tell you if there’s enough money coming in to cover your planned outgoings. If yes, great. If not, you can adjust accordingly. The important thing is that it helps you prioritise spending and consider the big picture, in terms of putting money aside now to achieve future financial goals.

Unfortunately, people can be averse to the idea of setting a budget. Why? Well, the fact is that budgeting has an image problem. When people hear the word “budget”, they think the focus is on what they shouldn’t do rather than what they can do. They think that to budget is to cut back, to restrict – that budgeting is a punishment for being “bad” with money.

But it’s a false economy to cut back on all the things that make life worth living.

Because what happens then, similar to dieting, is that people eventually crack and splurge, then beat themselves up for being bad at budgeting and stop – perhaps leaving them worse off than where they started.

So keep a line in your budget for something you enjoy. “Budget for joy”, as I call it.

For example, for some, maybe it’s the weekly meal out. Which, if there’s not enough in the budget, becomes a weekly takeaway. And, if there’s not enough money in the budget for that, becomes a weekly “fakeaway” – a homecooked version of your favourite takeaway dish.

It’s about coming up with options for how you can achieve similar for less.

Because at the end of the day, the only budget that really works for you is the one that you can stick with.

Talia Loderick is a money coach, who helps people to understand and take control of their finances. Her website can be found here