There’s no doubt about it – budgeting can be tough. Trying to find the right formula and then staying on track and motivated is probably as easy as running the Comrades Marathon backwards. But why not try these financial planning tips and you may find some fantastic savings and extra money come the end of this month!
There’s no doubt about it – budgeting can be tough. Trying to find the right formula and then staying on track and motivated is probably as easy as running the Comrades Marathon backwards. But why not try these financial planning tips and you may find some fantastic savings and extra money come the end of this month!
WHERE IS YOUR MONEY GOING?
You can’t create a budget unless you know where your money is going. Now although there are those big ticket payments – the car, the house, food and utility bills, it’s the smaller totals that really start to add up – snacks, clothes, entertainment. So first off, what you need to do is keep a total of every single cent you spend over a 30 day period. Record everything. After a month, divide all your expenses into specific categories – entertainment, transport, school fees etc. Add up the totals for each category and then add together each of those for your grand total. Then subtract that amount from your monthly take-home pay. If you spend more than you earn, you need a budget!
SET SOME FINANCIAL GOALS
Setting financial goals may seem like a chore, but it’s not and it has some great benefits. It’s also really easy. So firstly, set a goal that would really make you feel like you’ve achieved something – like halving your car repayment. Then set a ‘fun goal’ – like a weekend away at a Guest House. Now write your goals on a piece of paper and stick them to the fridge so that you see them every day.
CREATE YOUR BUDGET
You now need to decide which spending habits you need to change to save more money. This is all about choices — what you can live with and what you can live without to stay on target. You need to prioritise. You might decide that food is a priority, but then cut out all those snacks and soft drinks on your grocery list – you’ll be surprised at how much you save. Also look for bargains – the Internet is awash with great deals.
MONITOR YOUR PROGRESS
Review your budget each month to find out how well it’s working. If some parts of your budget aren’t working that’s okay, just tweak them a little. Making adjustments is a normal part of the budgeting process. Stay motivated by celebrating small successes, like the fact that you were able to save something, even if it’s just R50-00 more than you did before creating your budget. The point is that not only are learning to limit your spending, but you’re spending responsibly as well.
INVEST YOUR SAVINGS
Once you have your budget under control, it makes complete sense to start making your money work for you. Putting away R100-00 a month may not seem like much, but over 5, 10, 15 and 20 years the compound interest turns into real value and could well pay for that bucket list item like an overseas trip. There’s never been a better moment to create a budget and start saving – it’s never too late – get going today and you’ll see the benefits sooner than you think!