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Home Buyers Blueprint

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50 Tips to Better Budgeting

1. There are no secrets
The ability to save is based on a simple equation – spend less than you earn. Whilst this may be difficult for those on lower incomes given that spending on basic essential items may be more than your income, there are still opportunities to review your spending habits.

2. Start with a plan
Without a plan it is difficult to achieve goals. A plan also helps you to be disciplined and is like a road map that gives you direction to your destination.

3. What are your goals?
Write down a list of your financial goals. The may be as simple as taking the stress away from paying regular bills or you might just want to save for a “rainy day”. You can have more than one goal but if you write down your goals you will be more inclined to stick with them.

4. Try to avoid impulse purchases
A lot of the purchases we make could be considered as short term emotional purchases which make us feel good only for a limited time. When faced with these types of purchasing decisions, ask yourself the following questions;

  • Will this purchase change my life?
  • If yes, for how long?
  • How does this purchase impact my savings plan?

In other words – do I really need it?

5. It’s never too late to start a plan
It’s never too late to start a budget or savings plan. Even if you are on a pension you may still be able to put $10 a week into a rainy day savings account.

6. Out of sight, out of mind
Set up a small savings account that is not linked to you debit card or you can’t access through internet or mobile banking. This set and forget method will allow your savings to grow when you don’t even notice it.

7. Starting small can still work
It’s amazing how even a small amount of $10 per week can add up if you are disciplined and don’t touch your savings. A Christmas Club is ideal for this and could add up to over $500 a year with this type of plan.

8. Go shopping with a plan
Make a shopping list before you go to the supermarket and don’t give in to impulse purchases that you don’t need. Only purchase what is on your list.

9. Buy in bulk
Consider buying in bulk to save money. This can be a cost effective method for a group of friends to use their joint purchasing power.

10. Eat at home
Prepare meals at home and take your own lunch to school or work. Avoid expensive take away food and drinks.

11. Make sure your budget is realistic
When setting up your budget be realistic, and categorize your spending into essentials and non essentials

Essentials: Are basic things that allow you to live your daily life. These include: food, housing (including mortgage or rent payments, and maintenance), transport, health care, basic clothing, utilities and insurance.

Non essentials: Are items that make life enjoyable. These include: entertainment, internet, non basic clothing and impulse purchases.

12. Create a realistic saving plan
Calculate your monthly expenses, and compare that figure to your take-home pay. Where can you cut back? A few small changes add up to big savings.

13. Spend less than you earn
The most basic truth about saving is this: You can only save money if you spend less than you earn.

14. Start a savings account
Savings accounts are a great way to put aside small amounts of money for the future. Most people complain about expenses at Christmas time but putting as little as $10 per week into a Christmas Club account from early January can give you nearly $500 extra next Christmas.

15. Start an emergency savings account
Start a separate savings account specifically for emergencies. You may need urgent home or car repairs or have urgent medical expenses. By putting small amounts away for that “rainy day” you can take away the stress when these emergencies happen.  Add to the account regularly whenever you can and you will be surprise at how quickly your savings will grow.

16. Put your savings first
Make saving a regular habit and set aside a certain amount every month before you start spending. A good way to pay yourself first is to schedule automatic payday deposits so that part of each pay goes directly into your savings account. Don’t spend first and save what’s left, put your savings away first and then spend what id left over.

17. Don’t be too restrictive
When setting your budget don’t place too many restrictions on yourself. Set aside a small amount so you can treat yourself to something special once in a while.

Too many restrictions will make budgeting a painful process and may cause you to stop working towards your goals.

18. Set specific financial goals
When setting your financial goals don’t be vague. A goal of just saving money is not as strong as a goal to save for a trip or other specific purpose. It is a good idea to include both short term goals (within 2 years) and longer term goals (over 5 years), goals

Goals should always be specific, measurable, and inspiring.

19. Set a realistic food budget
A common mistake when budgeting is to under estimate the cost of food. By not setting a realistic food budget you will often spend over your budget. One way to avoid this is to set regular planned meals which you can price more accurately.

20. Build an emergency fund
Emergencies happen, and when they do, they can get expensive. Whether you are financially prepared for them or not, they are still going to happen. Why not set yourself up for success, and save up an emergency fund.

Ultimately a fund of at least 3 months of living expenses should be your goal. Putting money into an emergency fund each month should be one of your main budgeting priorities.

21. Separate your savings account
First time budgeters are often prone to taking money from their savings to buy something not in their budget. If you can manage your budget with several different accounts it will make it much easier as you can separate savings accounts from your spending account.

22. Getting out of debt
Reducing or eliminating debt should be one of your main budget priorities. If you can manage to pay a little extra off your loans or other debt you will be able to clear that debt sooner. Debt will always be a barrier to achieving you savings goals.

23. Set your plan and stick to it
Whatever method of budgeting you choose just make sure you stick to it. No budgeting system will work unless you are committed to making it work.

24. Budgeting tips for younger people
The earlier in your life that you can learn how to budget, the better off you will be in the long term. IF you learn to budget properly early on, you can build some serious wealth as you get older.

25. Retirement
When you’re young, retirement seems so far away, but if you can manage to put a little extra into your superannuation account you will reap the benefits later in life as you balance increases. 

26. Start when you are young
By starting your budget at a younger age you can accumulate savings quicker particularly if you are still living at home where your expenses generally are lower.

27. Share your vision
If you are in a relationship it is a good idea to discuss your financial goals together. A budget plan the all parties agree to has a much better chance of success than each party trying to do their own thing.

28. Set a target for your savings
Whatever your savings goals are, decide on the target. Once you have reached your target you can satisfy that goal (holiday, new car etc.) and set a target for your next financial goal.

29. Set a timeframe to save
It is a good idea to have a timeframe in which you want to achieve your financial goal otherwise you may drift along forever and never get there.

30. Using cash
As the world becomes more cashless and purchases are increasingly made by card or phone it becomes easy to buy things that are not in your budget.

By using cash you can see how much you have left each time you open your purse or wallet and this may cause you to forgo that impulse purchase.

31. Take you lunch to work or school
Buying lunch everyday can add up to a lot of money over the year. Try making lunch for yourself and your family to save money and then put any money you save into your savings goal account.

32. School fees and school expenses
Make a list of all your school fees and expenses and put them into your budget. You should aim to build up a buffer in your budget to cover any unexpected costs. Set up your budget so that you can cover these costs when they are due.

33. Review spending on sport and recreation
Sport and recreation can be costly especially if you have a number of family members participating. Take a hard look at all your expenses in this area and decide what is necessary and what you can give up. Make your any money you can save in this area is put toward your savings goals.

34. Shop around for bargains
When buying non essential items it always pays to shop around. Try alternative purchase sites such as Ebay, Gumtree or Facebook Marketplace as you can often buy near new goods at a great discount to retail price.

35. If self employed, cover your taxes
When running your own business set up a separate account to use for your GST. By doing this you won’t get GST mixed up with your general business bank account and will have the money available when you payment is due.

36. Resist the new car finance
When shopping for a new car don’t’ get trapped at the car dealers with offers of fast finance. Even if the interest rate looks good always check out all the fees and charges. It is best that you arrange any finance before you go car shopping.

37. Buy a near new car or demo model
It may be a great feeling to drive away in a brand new car but often you can save thousands of dollars if you buy a 6 month old vehicle with less than 10,000 kilometres on the clock. The dealers’ demonstrator models can also save you a lot of money compared to a new car price.

38. Buy a car that you actually need
It’s easy to get carried away with emotion when buying a car. The more certain you are of what car you actually need the less likely you will get carried away and blow your budget.

Try looking at car yards on Sundays if they are open as you won’t get hassled by sales people.

39. Planning for meals
Food is one of our largest expenses and often hard to manage. If you can select a few recipe’s and plan set meals for certain days of the week you will be in a better position than if you randomly decide on meals each day.

By planning meals in advance you can take advantage of supermarket specials and save even more money.

40. Be realistic with your food budget
Make sure your food budget is based on a healthy lifestyle. There is no point saving money if you have to starve yourself in doing so.

41. Saving for holidays
It’s easy to be prepared for holidays as you often know well in advance when you will be taking them. This gives you the advantage of putting an amount aside each pay period so you have enough to cover all the holiday expenses.

42. Limit your spending on birthdays
It is easy to overspend on birthday presents. Set yourself a limit for the year, make a list of all the birthday you will be buying presents for and stick to your budget. By making a list at the start of the year you may be able to buy presents early whenever you see a special or sale.

43. Include social spending in your budget
Make sure you consider what you spend on social activities and things like alcohol and gambling (even lotteries). This can all add up over the course of a year and can often be an area where you can save money.

44. Save For unexpected expenses
Set up your budget to include a rainy day fund. You never know when you will need money for emergencies such as a broken fridge or water heater. By accumulating funds in your rainy day account you can have peace of mind knowing you are covered for emergency expenses.

45. Home renovations
It’s a good idea to add a little to your rainy day account to cover larger home expenses or renovations.

46. Seasonal expenses
When setting your budget take into account which time of the year your expenses may be higher or lower. Heating is a higher cost during winter as is cooling in summer. You may be able to smooth out certain expenses by paying them monthly.

47. Budget to pay off short term debt
Short term debt such as credit cards and personal loans often come with very high interest rates. Try to stop using your credit card and increase your payments to pay it off sooner. All high interest rate debt should be paid off as soon as you can as it will hinder your financial progress as long as it remains.

48. Avoid Afterpay or other similar plans
Get into the mindset of saving first, buying later and you won’t look back. It is so easy to get trapped into buy now, pay later programs and whilst the payments are often small, if you take out a number of these contracts the amounts can be significant.

49. Use any pay increases wisely
Whenever you receive an increase in income put it toward paying off debt as a priority.

50. Reward yourself
Once you have reach a special milestone in you budget treat yourself to a small reward. You have put in the hard work and deserve a present.

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