‘Budgeting’ has to be one of the least appealing words in our vocabulary, but if you’re looking to take control of your finances you need to budget. It’s that simple.
While most people squirm at the concept, it doesn’t have to be that painful. In fact, if done correctly, creating and sticking to a realistic budget will not only make life easier, it can help you create even more money!
Developing a budget is not hard: simply calculate all of your weekly, fortnightly and monthly outgoings, set them against your income, and prioritise all expenses from most important to least important.
Essential and unavoidable spending, such as utility bills, rent and food should be placed at the top of your list; new clothes, a night out with friends and take-away lunches should be at the bottom.
This should give you a rough idea of how much you are ‘overspending’ each month, depending on how you structure your budget.
As a rule of thumb, you should be able to save approximately 10 per cent of your income.
Often the hardest part of budgeting, particularly with long-term goals such as paying off a loan, is maintaining your motivation. To keep yourself on track, set regular targets and monitor your progress. Start off with weekly goals, move on to monthly then finally to quarterly targets.
Be sure to track your progress and don’t miss out on seeing your hard work transform itself into real results.
If you are looking for a great free tools including mobile apps to track your expenses and monitor your budget then log onto the government website: www.moneysmart.gov.au
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