Budgeting Tips - Do’s and Dont’s With Budgeting
I would like to talk to you about getting started on a budget. Especially in these hard times with the economy not looking great and people losing their hours of work and losing jobs altogether. Now is a good time to sit down and work out your own finances.
Start by writing down all your debt amounts, loans, mortgages, rent and put the amount as you pay them, do not try and average the payments to be all the same frequency at this stage. Also add any interest costs you have like on overdrafts. Add any bank account fees you get charged monthly. Check your statements or go online to your accounts and see what you were charged over the last several months and add that cost on your budget. If you have a credit card or two, and pay a set amount each month on them, add this amount to your list. Then list your bills like power, phone, gas. Take an average amount for the power and phone and gas to get a close as you can figure. Do you have a cell phone that you put money onto? Don’t forget to add this on the list. Add a figure for groceries on an average basis also.
How many times a year do you go to the doctors, the dentist? If a regular visitor to doctors, add that fee to your list along with the prescription fee. Then think about water or land rates if you own a property. Have animals? They have vet bills that need to be added into? Next add an amount for entertainment. You go to the movies? Go out for a drink? Go clothes shopping? These sorts of expenses need to be accounted for also. Transport costs need to be added, petrol if you own a car and then add the rego and warrant fees or if a public transport person, add the cost of your fares up for a month. An expense to be added here is your savings. Don’t laugh!! Think about Christmas or Birthdays that need presents. If you put a small amount away each week, then you will be surprised at the end of the year how much you have.
What you need to be mindful of next is that if you get paid weekly, do not just go x2 for a fortnightly figure or x4 for a monthly figure. There are more than 4 weeks in a month and this is where a lot of people get caught out, so a calculator would be handy here about now. A monthly payment needs to be divided by 52 weeks. A fortnight payment divide by 26.
Work out all your outgoings on the same frequency as you get paid. This way, you will know how much you need each week or fortnight for all your outgoings.
It may looking daunting seeing everything together on paper but it will help you to have this list with you so you can see what you need to have put aside for what bill.
Believe me, from one who does this on a regular basis, it does work. I do this myself every so often when I realise I might want to take a holiday or buy a new big ticket item. Then I rearrange the amounts, take some off the entertainment bill and add more to the savings amount. That way, I don’t go and buy something outside of my means.