It’s no secret that we all like to splurge on pretty bags, a bottle of Ruinart Blanc de Blanc, or even a brand-spanking new car here and there, but when it comes to being able to live it up like Ty Dolla in his champagne-fuelled babe mansion, chances are your finances aren’t allowing it.
It’s time to talk about BUDGETS. The word itself is completely cringe-worthy, yet an extremely helpful and misunderstood method of saving. To learn more about the ins and outs of how to budget for success, we delved into the mind of Certified Financial Planner, Lauren Lyons, for tips on how you can plan your future finances.
Lyon’s begins by suggesting you make time to collate ALL of your statements and receipts and adding them up. This will give you a better overview of your current spending and overall financial situation. Once you have made it through the long eye-straining, painstaking task, follow the finance queen’s next steps!
Continue your week alike to any other, being sure to track all your expenses. This exercise will help you figure out whether your expenditure outweighs your income. Ideally, you want to be able to see where you can tweak and optimise your spending to work towards your goal. You will be able to see what you spend most on before you decide whether it’s worth it or not!
The First Month
The first month is crucial to your future budgeting endeavours, and now is the time to set a realistic goal or action plan that you can stick to!
Lyons says, “don’t set yourself up for failure. Be realistic about your budget and don’t leave yourself short.”
The Three Month Goal
Prioritise your financial goal more than before. By now, you should see that your spending habits have improved, and as a result, you should start seeing savings. Now, the ultimate query; What do you do with your savings?
Lyons’ mentions the importance of paying off your debts first and foremost. It’s important to remember that debts often come with interest, and interest well and truly sucks.
If you are one of the lucky ones without debt then start thinking about investing your savings into your retirement by contributing more to your super.
Don’t worry, when you’re retired and enjoying your golden years, you will have full reign of those extra dollars again!
What Does Your Everyday Bank Account Look Like
Lyons states that your everyday banking account should equal approximately twice your pay and your savings account should equate to at least 3 months worth of living expenses.
If you’re reading this thinking ‘well that ain’t gonna happen anytime soon,’ then no need to stress, you’re just like every other human being. Lyons strongly ensures that you can take the time you need in saving money for this goal, and you do not have to start from the word “go.”
Hitting the Halfway Point
By now, you’ll find that you are passing the halfway mark in your year and that things are running more smoothly than ever. But what if they aren’t? Simply reassess your spending habits and start again from the top!
Trial and error is a part of learning any new habit, and it’s important to remember that many people often do better the next time around. Using budgeting apps such as ‘Mint Budgeting App’ or ‘PocketGuard Budget App’ are great tools for helping you reach your goals, or for an alternative approach, Excel spreadsheets are also a popular choice.
Now it’s time to get budgeting! Happy saving readers!