Budgeting is a fundamental part of any advice we give at Plenty. No matter how small or large your salary, you should be aware of what comes in and out in order to have control over your financial life and to achieve your goals. These are the 6 budgeting tips to always keep in mind:
1. Set realistic goals
The truth of it is budgeting is hard. To make it worthwhile you need to set down goals as to why you are budgeting. These goals can be short term or long term but the key is they need to be realistic and achievable.
2. Know thy pay cheque
A lot of people don’t actually know much they take home every month after tax, super, education debt etc. It’s important to know how much you actually make on a monthly/fortnight basis.
3. Know thy budget
Again a simple rule but one a lot of budgeters forget about. This number will be framed differently for everyone. Some people think about their expenses weekly, some monthly and some even yearly. Whatever it is know how much you can afford to spend to reach your goals and then do everything you can to spend less than that number! A lot of people like to get to how much “flex-spend” they have each week – this is how much they can spend minus fixed costs such as rent, electricity, insurances etc.
4. Review and adjust regularly
On a monthly/weekly basis it is worth seeing how you are going versus your budget. Within a couple weeks you should get a very good feeling whether you can make the necessary changes to reach your goals. If you feel that the budget is unattainable it might be worth making some tweaks to your goals.
5. A helping hand
Getting someone to help you review and stick to your budget can make all the difference:
- Set a budget with a loved one– being a tight ass on a Saturday night can be a lot easier if you have your partner/friend/dog sitting next to you being a tight ass as well
- Get professional help – we know – you think getting professional help will be very expensive – well with Plenty we will tell you exactly what you can afford to spend to reach your goals and where you can shave some of those expenses and we do it for free. Find out about our budgeting help.
6. Accurate data
In the past budgeting was made 10x harder as almost everything was a guess – how much did you spend on clothing last year? How much on food? How much on your car? None of these questions could be answered reliability. Nowadays there are a number of financial management tools that sync with your bank account and allow for a (usually unflattering) look at your spending habits. Plenty is one such tool.
Budgeting is hard and hopefully these tips will help. Remember – when you are touring the Amalfi coast that Friday night out you missed will be looooooong forgotten.
The information contained on this page is of a general nature and may not be appropriate for your personal circumstances. You should obtain personal financial advice before acting on this information.