Week 2 February 2019 - Budget like a boss
Budgeting basics
Having a plan around how you earn, spend, save and invest your money is an important step towards taking control of your finances and improving your financial wellbeing. We all know this - in fact, 80% of Australians have a budget. The problem is sticking to it - only 20% of us actually put our budget into action and follow it!
The most common reasons we don’t budget - or don’t stick to it are:
We think it’s about taking out all the fun stuff, so it becomes unrealistic and doesn’t work
We write down what we ‘think’we spend, or forget to include all of our expenses so it doesn’t reflect what we actually spend
We use tools that don’t work for us - there are SO many more ways to budget than just using a spreadsheet
We prepare a weekly or fortnightly budget, but ignore the annual big picture
This week, your challenge is to let go of any negative thoughts or feelings about budgeting. Whether you realise it or not, you’re prioritising your spending/saving/investing. Making conscious choices about your priorities can help you feel more in control. Creating a money action plan (budget) is a great tool to help with this.
In the words of Dave Ramsay, ““A budget isn’t about restricting what you spend. It gives you permission to spend without guilt or regret. A budget is telling your money where to go instead of wondering where it went” Source: Dave Ramsey, Budgeting Made Easy.
Whether you’re a seasoned budgeter, or a newbie, this week you’re going to start a new budgeting journey. Keep in mind that this is an ongoing process because budgets aren’t a set-and-forget thing. You need to regularly review your plan, revise your figures, and possibly include expenses that you may have overlooked.
The important thing is that you get started - and if you’ve been keeping your spending diary, you’re already on the way. For the nitty gritty of the next steps, download our budgeting booklet and the worksheets.
We don’t promote any specific budgeting apps, but there are plenty out there. You can also find some great (free) tips and tools at ASIC’s MoneySmart website here, including an awesome budget planning spreadsheet (if that’s your thing). But if you lean towards the creative side of life, you might find Luna Jaffe’s books more your thing.
