Could you tell your accountant exactly how much money you spend, and what you spend it on? How much you need to put away to hit your savings goal? Do you have a savings goal? Budgeting Basics is for you.
As accountants we’re sticklers for a thorough budget but we know realistically, most of you haven’t sat down to put one together. Here are some tips on how to do it well, with some other bits of advice thrown in.
- Live within your means. Budgeting Basics 101. You have to be saving more than you spend! If your expenses are more than your income, it’s time to dial it back, now. What do you spend on that are luxuries, not necessities? Have 2 beers on Saturday night, not 8. Think about public transport rather than driving everywhere. Do you eat out regularly when you could be cooking at home? Small things add up and can make a big difference to your budget across the year.
- Make a savings goal. If you have no idea how much money you want or need to have saved in the next year, then motivation to syphon money away is pretty low. You’ve heard of piggy banks- start as small as that. Gold coins add up so quickly you’ll be surprised. Did you work overtime this week? Put the extra money into savings, not on a new jacket. Creating a budget will tell you exactly how much you can be saving per month. Don’t set the goal too high though, we all need spending money. Making it attainable means hitting the goal will keep you motivated for next month.
- Be smart about your debts. Home loan? Credit card? Look at getting your home loan refinanced to take advantage of the historic lows in interest rates right now. Change your credit card to a 0% rate option. You could consider using those savings to pay off a car loan early and save yourself even more interest.
- Get tech savvy. There are so many excellent apps available now that can help with your finances, especially budgeting. Stay tuned for a post about our favourite apps but in the mean time check out PocketBook to keep your spending under control.
There are so many budgeting templates available on the internet now that every one of you can put a solid budget together. If you’re unsure which of your expenses are tax deductible, give us a call so you can keep track of these throughout the year and be super organised for the next.