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 plan that will help you meet or exceed your goals.
Know your income.
Ensure you understand precisely how much money you'll have to work with each month.
Without this, it's difficult to predict how much you'll be able to save accurately. Start your budget by working out your total monthly income (after tax) while considering any additional factors that may prevent money from making its way to your bank account - such as direct superannuation payments.
Our Budget Planner helps you see how much you earn – and what you spend. This makes it easier to rein in your spending – and start saving sooner. Consider using a conservative estimate for those who are self-employed or have inconsistent income.
Know your expenses.
Once you’ve determined how much you’ll have coming in, you’ll need to determine 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 for services such as Netflix or Spotify!
A common mistake people make when generating a budget is forgetting to consider one-off costs - 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 understand your income and expenses, you can set your savings goals for individual months and the year.
The most crucial factor to remember here is that you should be realistic. If you set a huge goal and fail to meet it, it's easy to get disheartened and slack off in 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.
Considering these factors, you’ll be well on your way to achieving your financial goals in 2024.
For more information, get in touch with the team at Beyond Bank today.