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 use either an app, online tool, spreadsheet or a notebook to budget. 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 18-25 year-olds using an app or online tool compared to the UK average of 7% and the over 65s 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 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%).
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 that don’t budget – while those who check their bank balances regularly are happier than those that don’t.