What is essential expenditure?

When money is tight, it’s important to know the difference between essential and non-essential expenditure

As the cost of living crisis continues, most of us are reviewing our finances and exploring ways to save money.

But regardless of whether the cost of living is rising or falling, it makes very good sense to have a strong grip on your outgoings. Regularly reviewing these against your earnings will ensure you always manage your money effectively.

Couple reviewing their spending on a laptop

Why is budgeting important?

Having a budget helps create financial stability, both day-to-day and in the long run. Tracking expenses and expenditure and ensuring they remain within your budget will make it easier to pay bills on time, build an emergency fund and save for major life goals, such as buying a car or paying for a wedding.

Of course, during times of economic turbulence, budgeting can prove invaluable. It will ensure you’re able to make necessary savings on non-essentials in order to be able to meet the cost of essential expenditure.

What is essential and non-essential spending?

What are some examples of essential and non-essential spending?