Budgeting can be hard. So, we have 5 top tips on how to set budget goals. Even when you think you’ve got it under control, a curve ball flies at you and suddenly you’re struggling again.
Take a breath. Whether you’re a total beginner or a budgeting spreadsheet pro, we’ve got 5 tips to help you set budget goals and stick to them.
5 Tips – How To Set Budget Goals
1. Have real goals.
Firstly, 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.
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.
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.
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’s pretty much impossible to draw up a realistic budget if you don’t know where your money is going.
It all starts with knowing your spending patterns.
For that, you need to track your spending for a week, a fortnight or a month. Using an app, budgeting software or an online budget makes it easy. They can help you sort by amount and category, so you can easily see how much you’re spending on eating out, entertainment, or other incidentals.
It becomes very clear how small expenses can quickly add up. So, next crucial step is to convert the numbers into annual figures.
How To Set Budget Goals cont
3. Balance your books.
Now you know what you’re spending, you can compare it to what’s coming in. 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. Pull out your payslips and tax returns and see how much you’re really making.
If you’re spending more than you earn, chances are you’re facing a growing credit card debt or constantly strapped for cash. If these affect your budget goals, consider looking into debt consolidation options that can make planning easier. Talk to us if this is happening for you. 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. The easy app we use helps you get a good handle on all these areas. Just ask us how to get started.
Setting yourself a budget goal to cut spending in two or three categories like weekly groceries, transport, hobbies, clothing or entertainment can make a huge difference. Reviewing your budget regularly to track your progress makes it easier to monitor your progress and make changes where necessary. If you cut your spending by as little as 5% over 3 months, celebrate by cutting it even more next time. Success is its own reward – and in this case, it costs nothing.
How to set budget goals – pt 5
5. Planning 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, contact us. From developing good money habits to growing investments, we ‘design your path’ to help you get ahead financially.
If you want to know more on how to set budget goals contact us here about your financial enquiry today.
Disclaimer: This article is factual information only. It is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. The information in the article is reliable at the time of distribution, but may not be complete or accurate in the future. For information about a loan that may be suitable for you, call us on 7111 0022.
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.
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