Life is expensive! Regardless of your pay bracket or social circumstances, living within your means can be a constant struggle for the best of us. A set budget may feel idealistic or too restrictive, particularly when it comes to managing all those unexpected costs that constantly seem to pop up. But this doesn’t have to be the case.
Some lateral thinking and clear savings targets can make a tangible difference to your spending (and saving) habits. These five easy steps will help you generate a personalised budget that actually works for you.
We all approach money slightly differently – there are even gender differences when it comes to saving our money. Research reveals women prefer a slow and steady savings strategy while men tend to keep their eye on the prize, letting go of little luxuries in their race to the finish line.
Whether you identify more closely with one savings style or another, the key to creating a budget that suits your needs is to be honest with yourself about your lifestyle and priorities.
Be realistic both about what you can afford, what you can go without and how quickly you truly wish to meet your savings target.
Once you’ve assessed your savings goals and priorities, it’s time to take a closer look at your spending habits. Determining where exactly you’re spending your income each month will quickly reveal how and where you can start to save.
An audit of your spending doesn’t have to be a chore. All it takes is a little time and an excel spreadsheet.
Break your spending down into broad categories – we recommend utilities, healthcare, insurance, clothing, food, social actives and household expenses – to start you off.
A visual portrait of your spending, your excel spreadsheet will provide you with a solid foundation for your budget for next month and beyond.
Before locking in your budget for the next pay cycle, identify areas where you can lower your regular spend.
Social activities, eating out or that cheeky extra coffee are all great places to save a little each week. You might also be surprised by the amount you’re spending on regular bills. Think utilities, credit cards or even your health insurance.
Benchmarking your current policies and plans against your current needs and the wide range of products available on the market tends to uncover savings.
A clear savings goal will boost your motivation to stick to your budget! This means deciding what you are saving for and how long you plan to take to reach your target.
Whether it’s a home deposit, holiday, new car or special event, there’s nothing like a goal to keep you focused.
There are many helpful apps to record your spending as you go and help you stay on track. Check out Track My Spend for a popular, easy-to-use option.
While it is great to succeed, if you don’t quite stick to your budget, don’t panic. Take it as a learning experience, re-assess your plan and try again. The more experience you gain, the greater the likelihood you will succeed – and reach your savings goals!
iSelect does not compare all products in the market. Any advice provided in this content is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any product.