Budgeting is hard. Even when you think you’ve got it under control, a really cute cardi just leaps off the rack and suddenly you’re struggling again.
Take a breath. Whether you’re a total beginner or a budgeting spreadsheet boss, we’ve got tips to help you set budget goals and stick to them.
1. Have real goals.
It’s hard to keep a budget in check without tangible goals. If you’re just trying to spend 'less', you’re more likely to lose focus.
Be clear about why you want to budget. Maybe you’re putting money aside for a trip, or thinking about starting your own business, or recovering from an expensive Christmas. You might just want to take back control of your spending.
Whatever the reason, write it down. When you know you’re working towards something real, you’ll also know how to get there successfully.
2. Track your spending.
It’s impossible to draw up a realistic budget if you don’t know where your money is going. You may have a rough idea, but an accurate budget pulls no punches – and forces you to look at every single transaction coming out of your account.
It all starts with knowing your spending patterns. For that, you need to track your spending for a week, a fortnight or a month. Our SpendME Transaction Account gives you access to the Me Go app which helps you sort by amount and category, so you can easily see how much you’re spending on eating out, entertainment, or tiny hats for parrots.
Next, convert the numbers into annual figures. It becomes very clear how small expenses can quickly add up.
3. Balance the books.
Now you know what you’re spending, you can compare it to what’s coming in. Pull out your payslips and tax returns and see how much you’re really making. Even if you don’t have a regular income, averaging it out over the year can give you a good sense of how your cashflow might look week to week.
If you’re spending more than you earn, chances are you’re constantly strapped for cash or face a growing credit card debt. If these affect your budget goals, consider looking into debt consolidation options that can make planning easier. Plus, being able to see any potential issues is the best way to start addressing them.
4. Save money on your biggest spending categories.
Trawling through the biggest spending categories in your budget can be a great way to find opportunities to save.
Set yourself a budget goal to cut spending in two or three categories like weekly groceries, transport, hobbies, clothing or entertainment. Review your budget regularly to track your progress. You might even make a game of it. If you cut your spending by 5%, celebrate by cutting it even more next time. Success is its own reward – and it costs nothing.
5. Plan in advance.
Nothing is worse for your budget than impulse buying. Plan spending ahead of time wherever you can. Going to the supermarket? Take a list and stick to it. On holidays? Set a daily limit and stick to it. Got a friend’s wedding coming up? Decide how much you can afford and stick to … you get the idea.
Knowing exactly what to expect helps keep your budget under control and stops you from dipping into your savings .
Getting started with budget goals isn’t easy, but we’re here to help. For more fast ideas on budgeting, take a look at ME's fast, fun and free financial education hub. From developing good money habits to growing investments, Ed is designed to help you get ahead financially.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.