Top 9 Budget Tips(1)

Christine’s Top 10 Budget Tips

Whether you’re already investing or planning to in the near future, a well put together budget is essential.

I liken a budget to the boy scout message: ‘Always be prepared and you won’t be disappointed!’
You may never have had a budget before and the whole concept seems foreign to you – Don’t despair, help is on its way!

People ask me regularly how they can afford to invest. I tell them it’s easy – start by understanding your current financial situation.

1.    Be sure to include all of your anticipated income for the year, including wages, allowances (Family Tax Benefit, Pensions), share dividends and other income.

2.     Look at your tax returns over the past five years – have you received tax back? If so, average it out for that period and add it to your income.

3.     Be thorough when you add up your anticipated expenses. Go through your bank records month by month and try to sift out regular from one- off expenses.

4.     Go through the one-off expenses and allow them an annual cost, then mark them on your budget as such.

5.     Keep a spending diary for one month. This allows you to focus on budget ‘leakage’, those little expenses which really can add up. Check out free budget apps or see if your bank provides one with your online banking.

6.    Pay down your debt. Don’t let a maxed-out credit card stop you from making true wealth.

7.     Uncover your borrowing capacity. Talk to your bank manager or mortgage broker to find out how much you could borrow to start (or build) your property portfolio.

8.     Clean up your superannuation accounts. Each extra super account equals one more lot of administration fees to pay. Consolidate them as soon as possible.

9.     Review your insurances, mortgage, annual outgoings, how much you pay for where you live – savings in all areas will help prepare you for investing.

10.   Be honest about the state of your finances. Determine your financial state and make informed decisions. But don’t let it stress you out to the point of inaction!

Being honest about the state of your finances helps you plan for your investments. It may sound hard… even overwhelming but imagine how much money you could save over the years just by being more aware of your spending habits.

Take control of your money now, watch it add up, and imagine what sort of freedom that will buy in the long run.

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