Making and sticking to a budget is not easy. After all, no one likes to be told how much they can spend on what they want and need. But there are ways to ease the pain of the process.
According to research conducted for ASIC, about 44 per cent of Australians say they have a short-term financial plan in place, while only 23 per cent say they have a long-term plan.
If you want to take control of your finances, a budget is essential. Here are some tips to make the process as pain-free as possible.
Take advantage of tech
One of the reasons that people don’t budget is that they think it’s too complicated. Not so long ago, budgeting was a lot more difficult, but these days there are any number of apps ready to make the task easier. These apps contain the tools and methods used by accounting professionals. Use ASIC’s MoneySmart interactive budget planner to help you work out where your money is going and where you might be able to save. ASIC’s MoneySmart TrackMySPEND app can help to manage your personal expenses on the go.
Start with small cuts
Once you can see where your money is going and you decide it is time to rein in your spending, you don’t have to search for enormous savings. In fact, you are much better off tackling the smaller items that you frequently spend on, whether that means drinking coffee at home instead of at a coffee shop or taking your own snacks to a movie instead of paying full price at the candy bar.
Avoid instant gratification
If you’re looking to make a purchase, force yourself to think about it. The 30-day rule is a perfect way to allow yourself to test how much you actually need an item. If after a month you still have the desire or need for the item, you can go ahead and purchase it. If, however, you have already forgotten about it and moved on to the next thing, you have just saved yourself money.
Shop with a list
Supermarkets have well-researched strategies to entice you to spend more than you need to when you walk through the doors. The best way to combat those tactics is to have a plan and the easiest way to do that is to arm yourself with a shopping list before you walk out your front door and adhere to it. Getting this strategy right can improve both your bottom line and your waistline as it can help you avoid loading up on junky snacks.
Do you have a budget? What tips do you have for others to help stick to a budget?