How to Setup a Budget for 2024

As we commence in the year 2024, meticulous planning and consideration are crucial to ensure that your financial resources align with your aspirations. This comprehensive guide provided by XTB is a step-by-step approach to assist you in setting up an effective budget for the upcoming year.

Evaluate Your Financial Situation

Begin by conducting a thorough evaluation of your financial landscape. Take stock of your income sources, including salary, bonuses, and any supplementary earnings. Identify fixed expenses such as rent or mortgage, utilities, and insurance, along with variable expenses like groceries, entertainment, and dining out. Don’t forget to account for debt payments and savings contributions.

Define Your Financial Goals

Establishing clear financial goals for both the short and long term will help you plan ahead. Whether it’s building an emergency fund, repaying debts, or saving for specific objectives, prioritise and outline these goals based on their urgency and importance.

XTB is now offering Investment Plans which is a smarter way to invest your savings. Investment Plans in an ETF based product where you can build your own portfolio based on over 350+ ETFs, differing in composition, rate of return, or rating. The best thing is the fact you don’t need to calculate anything.

You just set a percentage you would like to be invested in each ETF and you can start investing with as little as £15. You have the possibility to run up to 10 Investment Plans simultaneously, all plans are free to run.Investing in ETFs is commission-free turnover equivalent up to 100,000 EUR (then comm. 0.2%, min. 10 GBP).0.5% currency conversion cost may apply.

You decide exactly how long your investments will last, having the option to open, close or edit your plans any time giving you the ultimate flexibility of how you control your money.

List Your Expenses & Differentiate Between Needs and Wants

Categorise your expenses into fixed and variable categories. By reflecting on past spending patterns you can try to estimate variable expenses accurately. This step provides a comprehensive overview of your financial outflows.

In the process of budgeting, it’s essential to distinguish between essential needs and discretionary spending. Prioritise the fulfilment of basic needs over non-essential expenditures and identify areas where potential cutbacks can be made.

Allocate Funds for Savings and Debt Repayment

It is extremely important to allocate a portion of your income to savings and debt repayment. Consider automating transfers to streamline the saving and repayment process, making it a consistent and integral part of your financial routine. In addition to that, prioritise the establishment or maintenance of an emergency fund. This financial buffer provides protection against unforeseen expenses and serves as a fundamental element of a robust financial plan.

Review and Reflect

At the conclusion of each month or quarter, review your actual spending against your budget. Identify areas for improvement or adjustment as you plan for subsequent months.

Final Thoughts

Be flexible and willing to adjust your budget as circumstances change. Regularly review your budget, and make necessary adjustments based on alterations in income or unexpected expenses.

Investment Plans are a great way to start your passive investing journey. The recently introduced autoinvest functionality provides clients with the option to select from available funds in their XTB account or opt for a bank transfer to consistently augment their individual portfolios. Empowering users through a user-friendly app interface, clients can easily establish recurring payments tailored to their preferred frequency, whether it be on a daily, weekly, or monthly basis. This flexibility in recurring payments ensures adaptability to evolving financial needs and investment objectives. Download the XTB app to get started!

XTB provides a wide range of educational materials to help you in every step of the way whether you are a novice investor or an experienced trader.

In conclusion, the creation of a budget is a dynamic process that requires adaptability and commitment. Regularly revisiting and adjusting your budget will empower you to stay on track and make informed financial decisions throughout the year, ultimately contributing to your financial well-being and success.

Your capital is at risk. The value of your investments may go up or down.

*All your investments under the Plan are commission-free up to 100 000 EUR equivalent monthly turnover. Transaction above this limit will be charged with 0.2% commission (min. 10 GBP). If you invest in foreign ETFs a 0.5% currency conversion fee may apply.