SunLife have researched people's budgeting habits
- More than half never formally budget
- 22% have either no idea or a ‘rough idea’ of incomings and outgoings
- Those who budget formally are happier than those that don’t
More than a fifth (22%) of people in the UK do not formally budget, admitting to having only a ‘rough idea’ or no idea at all about the state of our own finances, according to new research from SunLife.
The study, which asked more than 3,000 people about their budgeting habits, discovered that only 44% of people use either an app, online tool, spreadsheet or a notebook to budget. More than a third (35%) said they don’t budget formally, but do always have a clear idea of their incoming and outgoings, 16% said they had a ‘rough idea’ while the remaining 6% said they don’t budget at all.
Sunlife found that younger people are much more likely to budget than older people, with 57% of 18-24 year olds saying they budget formally compared to just 32% of over 65s. Younger people are also more likely to make use of technology to budget, with 18% of 18-24 year olds using an app or online tool compared to the UK average of 7% and the over 65's figure of 1%.
Dean Lamble, Managing Director of SunLife said: “There could be lots of reasons why younger people are budgeting more formally than their parents and grandparents generations. But, living through seven years of recession – starting at around the time many of this generation started to become responsible for their own finances – has probably had a huge effect on how they view money. The continuing rise in the cost of attending university and buying your first home could also be forcing more young people to keep a very close eye on their finances.”
Despite the increasing dominance of technology in our everyday lives, of those that do budget formally, the trusty old notepad is the most popular method, with 22% budgeting using a notebook or some other note making with women (28%) much more likely to use this method than men (15%).
The next most popular method was via a spreadsheet on the computer (19%); this was more popular with men (23%) than women (16%).
Keeping the balance
As well as studying people’s budgeting habits, the research also looked into how we check our bank balances, either online or in branch and found that more than a third (34%) check several times a week and more than a quarter (26%) check weekly.
SunLife’s research has also revealed a strong correlation between happiness and budgeting and happiness and balance checking. Those who budget are happier than those who don’t, especially those who budget online who are happier than those who don’t budget - while those who check their bank balances regularly are happier than those who don’t.
Dean Lamble, managing director of SunLife concludes: “With UK personal debt now standing at 112% of average earnings and UK households saving just 4.9% of their incomes (the lowest proportion since 2008)1, we should be keeping a close eye on our finances, but the shocking truth is that less than half of us formally budget with many people admitting they have little or no idea how much money is coming in and out.
“What is interesting, however, is that the vast majority of us are checking our bank balances regularly, with 23% checking them daily, 34% several times a week and 26% weekly; this maybe suggests that easy access to our accounts has taken over from formal budgeting for many people.
“But whether you prefer the trusted pad and paper or are more technologically inclined our research shows that those who budget in some way, either formally or informally, are happier than those that don’t, so it is worth keeping on top of your finances, not just for your financial well-being, but your personal happiness too!”
1.The Money Charity - The Money Statistics September 2015