There are many benefits that come with budgeting. Creating a budget is something that everyone can do. It doesn’t matter how much you earn, what expenses you have, or which stage you are at in life. They can be created specifically for your needs. In this blog, we share budgeting tips to help you to manage your finances, but first, here are some reasons you might be considering a budget:
Set and meet a savings goal
Have a big trip on the horizon? Looking into high schools for your kids? There are plenty of expenses in life that add up fast, and creating a budget is a great way to work towards them. You may even have a bigger goal in mind, such as buying your first home. Every little bit counts and budgeting will help get you closer.
Overview of your finances
You may think you are spending wisely, but often on closer inspection of where your money is going, you may discover otherwise. Often we spend blindly, thinking we are keeping track, but when we add up the numbers, it can be a shock. Creating a budget lets you see exactly where your money is going and what you are spending it on.
Improve your spending
Finally, with a budget, you can improve your spending. You don’t have to cut out the luxuries, but rather just look at cutting down in places to help you add more money to savings instead.
No matter which reason applies to you, creating a budget is a practical solution. It puts you in charge of your finances. Here are some great budgeting tips to help.
Budgeting Tips – Manage Your Finances
Start with the Past
This may sound draining, but it really is the best way to do it. It’s best to go back about a year, so you get a full overview of all your expenses. This might include insurance and other bills that come at different stages throughout the year.
Print out your statements and run through them with different coloured highlighters. For example, use yellow for household expenses, green for car expenses and orange for entertainment. Just being able to see this at a glance will give you a good indication of where your money is going each year. And remember, a budget isn’t about cutting out bad spending. It is about being aware of where you money is going and cutting down on areas. Maybe you didn’t realise you went out so much?
Set Achievable Goals
Look at where you are and where you want to be. There is no point cutting out all entertainment expenses, just to buckle down and save. This just isn’t realistic and you will end up slipping up, which will put you back at square one. Instead, set goals you can achieve, and always allow for ‘anonymous’ expenses, such as a couple of dollars for the cake stand at school. You need a bit of leeway for these small expenses that can add up.
Open a Savings Account
Now you have a goal in mind, make sure you have a savings account set up. The most important thing when it comes to your savings account is to ensure you are earning interest on the money. Opt for an account that has a good interest return, after all this is easy money in your pocket that will give your savings a good boost.
By using cash instead of your credit card or bank card, you will become much more aware of your spending and less likely to overspend. This is one of the best budgeting tips out there. Take out a certain amount each week and watch where it is going – don’t let yourself spend beyond this. It is so easy to tap away on a card and not even consider where your money is disappearing too.
Ring all your providers
Another one of those golden budgeting tips. This one can be time-consuming, but it is so worth it. Ring around all your providers, mobile phone, internet, insurances, etc., and look for a better deal. Often all you have to do is ask, especially if you have been with them for a while.
Stick to It
Don’t let yourself go, as bad habits will come back really quickly if you find yourself giving up. If you have the odd slip-up, that’s fine, get back on track and go again. And if you are finding it is just too hard, this may mean you need to take a look at your goals and readjust them to make them more achievable. It’s all too easy to feel like a failure if you can’t meet your goals. However, if this is the case, it is more likely that your initial goals just weren’t achievable. Budgeting apps can be useful if you are struggling to budget yourself. Money Brilliant is one of the budgeting apps available in Australia. Budgeting takes hard work and perseverance, but the results speak for themselves. Use these budgeting tips to help you to manage your finances and soon you’ll be in a good position to reach your savings goals. If you need a bit of extra help managing your money, get in contact.