Budgeting & saving
The wallet challenge – savings and budget checklist
30 August 2017
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Budgeting & saving
30 August 2017
Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.
Budgeting and savings might sound very basic, but many people find it difficult to get these fundamentals right, or don’t have these in place at all. Here are some tips to help you get started, and on the right track to building your personal wealth.
If you are planning to go anywhere, you will need to know your starting point and destination, otherwise you’ll just be going around in circles. Growing your wealth is no different.
You can do some easy audits and use one of the calculators available to help you find out your current worth, or your starting point.
Where do you want to get to? What are your goals? These answers will vary according to your age and personal circumstances. For example, do you want to save for a wedding, first home or retirement? Once you know your destination, you can start drawing up a roadmap or plan to get you there.
ln order to have more money to save or invest towards your goals, you need to live within your means and avoid unnecessary debt.
This means learning how to budget – that is, better understanding how you are spending your money and not spending unnecessarily or more than you can afford. It’s a good idea to get into the habit of regularly checking your bank statements.
To do better understand your spending habits and to put a budget in place, you need to compare a period of, say, three months of what money comes in (all your income after taxes) against what goes out (all your expenses).
Once you’ve worked this out, create a budget or a plan on how you will spend in the future. And stick to it!
When creating your budget, you would be wise to work out ways to cut your costs and reduce unnecessary spending.
For example, when did you last review whether you are paying too much for your internet plan, phone, utilities and especially your home loan?
The new financial year is a good time to go through your all expenses and to check whether you can negotiate a better deal from your supplier or its competitors.
Some helpful cost cutting questions to ask yourself include:
Saving what’s left over each month will help you achieve your goals faster, but this requires a disciplined approach. For example, each month after you have been paid you should schedule a regular payment into a savings account – or even an investment, such as a managed fund – so that you’re not tempted to spend any available money. Reminding yourself of what you are saving for could also motivate you stay on track. Consider withdrawing your spending money at the start of your pay period, locking away your cards to ensure you don’t overspend. If you really want something then it will force you to take more time to consider it rather than buying it on impulse.
Remember to keep some money aside for emergencies and rainy days.
If you continue to make minimum repayments on your debt, for example on your credit card, you’ll just get deeper into debt. So it’s important to find smarter ways of dealing with your debt.
Making regular, fixed payments will help keep your debts from spiralling out of control. And paying off your debts faster by making extra repayments or paying more often will help you get rid of them faster.
If you have multiple debts, such as different credit cards, loans and a mortgage, consider consolidating them. This means rolling them all into one loan, such as a mortgage or personal loan, which has the lowest interest rate.
For more tips on how to improve your personal wealth, talk to a CERTIFIED FINANCIAL PLANNER® professional.
Tags in this article: Budgeting & saving
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The wallet challenge – savings and budget checklist30 August 2017 Budgeting and savings might sound very basic, but many people find it difficult to get these fundamentals right, or don’t have these in place at all. Here are some tips to help you get started, and on the right track to building your personal wealth. Have a planIf you are planning to go anywhere, you will need to know your starting point and destination, otherwise you’ll just be going around in circles. Growing your wealth is no different. You can do some easy audits and use one of the calculators available to help you find out your current worth, or your starting point. Where do you want to get to? What are your goals? These answers will vary according to your age and personal circumstances. For example, do you want to save for a wedding, first home or retirement? Once you know your destination, you can start drawing up a roadmap or plan to get you there. Learn to budgetln order to have more money to save or invest towards your goals, you need to live within your means and avoid unnecessary debt. This means learning how to budget – that is, better understanding how you are spending your money and not spending unnecessarily or more than you can afford. It’s a good idea to get into the habit of regularly checking your bank statements. To do better understand your spending habits and to put a budget in place, you need to compare a period of, say, three months of what money comes in (all your income after taxes) against what goes out (all your expenses). Once you’ve worked this out, create a budget or a plan on how you will spend in the future. And stick to it! Be smarter about your costsWhen creating your budget, you would be wise to work out ways to cut your costs and reduce unnecessary spending. For example, when did you last review whether you are paying too much for your internet plan, phone, utilities and especially your home loan? The new financial year is a good time to go through your all expenses and to check whether you can negotiate a better deal from your supplier or its competitors. Some helpful cost cutting questions to ask yourself include:
Become more disciplinedSaving what’s left over each month will help you achieve your goals faster, but this requires a disciplined approach. For example, each month after you have been paid you should schedule a regular payment into a savings account – or even an investment, such as a managed fund – so that you’re not tempted to spend any available money. Reminding yourself of what you are saving for could also motivate you stay on track. Consider withdrawing your spending money at the start of your pay period, locking away your cards to ensure you don’t overspend. If you really want something then it will force you to take more time to consider it rather than buying it on impulse. Remember to keep some money aside for emergencies and rainy days. Better manage your debtsIf you continue to make minimum repayments on your debt, for example on your credit card, you’ll just get deeper into debt. So it’s important to find smarter ways of dealing with your debt. Making regular, fixed payments will help keep your debts from spiralling out of control. And paying off your debts faster by making extra repayments or paying more often will help you get rid of them faster. If you have multiple debts, such as different credit cards, loans and a mortgage, consider consolidating them. This means rolling them all into one loan, such as a mortgage or personal loan, which has the lowest interest rate. Get adviceFor more tips on how to improve your personal wealth, talk to a CERTIFIED FINANCIAL PLANNER® professional. |
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