“A budget is telling your money where to go instead of wondering where it went” – Dave Ramsey
I love this quote because to me, this is exactly what budgeting comes down to. It is not about restricting yourself and feeling trapped by finances it is about taking control of your finances to build freedom of choice and opportunities that really matter to you.
The truth is you are never going to have enough money if that is the story you continue to tell yourself. Spend the next month tracking all your finances, not just your wage or invoice but any money that comes into your account, money you find when you are doing your laundry, under the car seat and even in the back pocket of an old wallet – track everything. There are two things I can guarantee, firstly there is more money coming to you that you were aware of and secondly, you weren’t aware of how much you were spending.
Once you have track your income and accounted for your expenses, now comes the next stage of budgeting – minimise your costs to maximise your profit. Profit means freedom and choices. Here are our tips to minimise your expenses;
- Compare rates – if you have a loan (of any sort) take some time to analyse interest rates and find out the most cost effective opportunity for your repayments
- Be debt-free -pay your loans off as fast as you can. It doesn’t make sense to be putting extra money in a savings account if it means you are then eventually paying that savings to the bank in interest
- Build a safety net – build a weekly amount of savings into your budget (no matter how small or large) to make sure even on the months were the budgeting might not quite line up you have a safety net of funds you have saved for an emergency
- Compare prices – this can be time-consuming but it will be financially worthwhile. Write a shopping list, quickly assess which supermarket in your area is offering the best price and stick to your list. Need to fuel your car? Download the app Petrol Spy and compare which petrol station is offering the best price.
- Stay accountable – track your finances and keep yourself accountable to your goals
- Be realistic – set realistic savings goals and we always want you to enjoy yourself but within your means
- Pay with your money – avoid apps like AfterPay or even credit cards that give instant gratification with your purchase but leave you with debt. If you want to buy small ticket items e.g. clothing etc. save a little extra each week and buy it with your own money so you can have the instant gratification without the following debt
- Say no – there is no shame in saying no to something because it doesn’t align with your budget and/or overall goal