How to Budget 101: A Beginner's Guide To Saving

Complete control over your money

Seeing where you have been spending in black and white will allow you to take the power back with your spending, and help you to feel in control of your finances.

Uncover spending patterns

Spending too much on work lunches? Bought a few too many rounds of drinks at the weekend? Understand your spending patterns, and find saving opportunities you can live with.

Transparent tracking

Tracking your spend against your financial goals will give you more of a push not to buy that morning coffee or unnecessary item.

Saving for a rainy day

Clearly visualising your incomings and outgoings will give you an idea of how much you can save, and give you more peace of mind.

Create a safety net

Squirrelling away a few dollars here and there will give you a safety net in case of emergencies, and help you to be prepared for whatever life throws at you.

Worry less

Knowing you have a little extra money tucked away will help relieve some of those money worries, giving you more time to worry about the things that really matter to you.

Determine why you need a budget

Need help with budgeting money? Discover what your main savings goal is, and how you can best achieve it. Sit down and write down your financial goals. Maybe you’re saving for a holiday, or just want to have a little extra each month so you aren’t living from pay cheque to pay cheque.

Below are just some of the reasons people decide to track their spending with a monthly budget:

• To reduce overspending in problem areas.
• To stay on track with long-term goals.
• To reduce conflict between partners.
• To ensure that your spending is reflective of your values.
• To break the cycle of living pay cheque to pay cheque.
• To live within your means.
• To get out of debt.

Get a full picture of your spending habits

First, add up all your income so you can see how much you have coming in each month. Make sure you include all of your income, including your salary, money from any side hustles or second jobs, child support or alimony arrangements, business income and any income you receive from investments. If your income varies from month to month, or you are working freelance, one way to get the most out of your budget is to essentially pay yourself a salary. This way you can decide on a set amount you are comfortable with, and save anything leftover on a good month to cushion you through a bad month. This will also help you to curb any unnecessary spending, and help you to feel more financially stable.

Once you have noted your income, you can start to create a list of outgoings. Once you have this all noted down, you can start to see what is realistic for your budget. Start by tracking your spending for 30 days, or looking at your spending for the previous month. There are a number of ways to track your spending:

• Spreadsheet budgeting.
  Whether you're a spreadsheet wizard or an Excel beginner, entering your purchases into a spreadsheet will give you full visibility on your spending. This can be time-consuming, and you may forget now and then, but will ultimately give you the clearest view of your finances.
• Note it down.
  Keep a notebook to hand and note it down whenever you make a purchase.
• Budgeting Apps.
  There is a range of budgeting apps available to make it easier to track your spending by linking your bank accounts and credit cards. Be sure to link all of your accounts to ensure you get an accurate view of your spending.
• Bank Statements.
  Review your bank statements and credit card statement to track your spending across more than one account. The only downfall with keeping a budget this way is the statements may not have your transactions detailed as you would like, and you may not remember what certain transactions were for, so it may be better to just use your bank statements as a starting point when you are putting together your budget.

Set specific budgeting goals

Personalise your finance goals. Think long-term and set actionable, realistic goals. The key to budgeting is to be specific with your goals and have a solid deadline to work towards. Instead of saying, *"I'm saving for a trip overseas," *you should say, *"I'm saving $10,000 by June for a trip overseas." *Cementing your goals will give you the motivation you need to make your savings dreams a reality, and give you something more concrete to work towards.

Some popular long-term finance goals are below:

• Saving for retirement
• Education costs
• Paying off debts
• Travel and holidays
• Buying a house
• Buying a new vehicle

Choose the budgeting format that works best for you

With your income set out in front of you, it’s time to lay the foundations for your budgeting and forecasting set up. It’s important to choose a budget management system that works for you, taking into account what you value.

Below are two of the most popular simple budget systems you can implement today!

Keep up to date

Use a calendar to map out any irregular expenses you may need to plan for, such as annual holidays, Christmas and birthdays, and other important payment months, such as tax time or annual car registrations and inspections.

Automate your savings transfers

Have a specific transfer set up at the beginning of the month that transfers your savings for the month automatically. Then leave it where it is!

Set up direct debits

Ensure your bills are automated so that money budgeted for bills and other expenses goes straight to those things . If it’s gone before you can get your hands on it, you’re less likely to spend it.

App tracking

Track your spending with a budgeting app to make sure you’re sticking to your goals. An app makes it easy to keep your eye on your linked accounts and see where your money is going each month.

Save, save, save

Set up a savings account and keep adding to it each month. Little by little, your savings will increase.

Think long-term

Give yourself long-term goals and save more. Try not to push your expenses into the following month, and be sure to keep an eye on any birthdays or holidays coming up in your budget calendar and budget accordingly.

Take the little things into account

Don’t forget about those small charges that can mount up, such as that $2.50 fee when you withdraw money, the $12 fee on your bank account or that morning coffee pick-me-up. Make room for these in your budget to avoid any discrepancies.

Be realistic

Don’t plan an unrealistic budget for yourself that you’ll never be able to achieve. Set yourself goals you can reach, and you will save more in the long run. See how it goes after the first 30 days, and if you can’t stick to it, change it!

Make monthly adjustments

Be strict with yourself, but make sure you account for the change. Small changes such as increased monthly repayments, changes to your interest rates on your mortgage can affect your budget. Adjust to these changes and you will save more later down the track.

Try not to overspend!

Stick to your budget! If you’re spending more than you’re earning, you will find yourself in debt - fast.