New year, new budget.
The start of a new year is an ideal time to re-evaluate how you spend money and how much you may be able to save in the year to come.
The trouble is, where do you start? It can be a daunting task working out a budget for an entire year, but by keeping a few simple things in mind, there’s no reason why you can’t come up with a financial plan that will help you meet, or exceed, your goals.
Know your income.
Make sure you understand exactly how much money you’ll have to work with each month. Without this, it’s difficult to accurately predict how much you’ll be able to save. Start your budget by working out your total monthly income (after tax), while keeping in mind any additional factors that may prevent money from making its way to your bank account – such as direct superannuation payments.
Know your expenses.
Once you’ve worked out how much you’ll have coming in you’ll need to work out what’s going out. This should include everything from essentials like rent, power and water all the way through to monthly repayments on any debt you may have accrued over the years. Don’t forget to include subscription costs such as Netflix or Spotify!
A common mistake that people make when generating a budget is forgetting to take one-off costs into account – such as your annual car service. These are no less important, and by including them in your budget it’s easier to arrive at a more achievable figure for how much you can save over a year. If you’re worried about forgetting one of these necessary payments, it’s a good idea to include an emergency buffer in your budget, just in case.
Once you’ve got an understanding of your income and expenses, you’ll be able to set your savings goals for individual months and the year as a whole. The most important factor to keep in mind here is that you should be realistic. If you set yourself a huge goal and fail to meet it, it’s easy to get disheartened and slack off on subsequent months. To avoid this, start off with small, achievable goals at the start of the year. Meeting these and seeing your bank balance grow will be the perfect motivation to both continue saving and increase your objective from month to month.
By keeping these factors in mind, you’ll be well on your way to achieving your financial goals in 2019. For more information, get in touch with the team at Beyond Bank today.