Sticking to a budget isn’t the most glamorous pursuit, but it is often the difference between falling short of your financial goals and achieving them. If you’ve never tried to budget before, or like many you have tried and failed, then the following tips for creating an easy-to-follow budget will definitely help your cause.
Often the toughest part of a budget is setting up a simple system that’s easy to stick to. So here is a free, downloadable budget planner template to use as is, or alter as you see fit.
There is a lot to take into account when forming a budget, but following a few simple steps can help when creating an easy budget.
1. Gather All Relevant Information
To get an idea of your more significant expenses, it’s a good idea to keep all your receipts and bills for a few months. This has two advantages:
- It shows precisely how much you’re spending and on what
- It brings to light any expenses you might be incurring that you don’t actually need
The expenses you need to continue to pay can then be put into a basic budget template. This way, you can anticipate and account for all your upcoming expenses.
Experience shows that it is regularly the small discretionary expenses which contribute to overspending. eg a few coffees a day can add up to about $70 a week.
2. Keep it Simple
The more complicated you make your budget, the more likely it is that something will slip through the cracks.
The easiest way to go about where your money may be directed is to think about it like this:
- Your remuneration, minus:
- Expenses: include all non discretionary bills such as car or house payments, utility payments, insurance, fuel, food etc. These expenses need to be covered as a priority.
- Savings: if you are saving, then set aside an exact amount from every pay that you don’t touch.
- Anything left over is your spending money for discretionary leisure activities, new cloths, gifts and the like.
If the outcome shows that you break even, then that’s a successful budget. However, if you end up with a negative number, then keep an eye on where things went wrong in the discretionary spending area or whether your savings target is too ambitious.
3. Automate Your Savings
Trying to save is probably the most difficult part of a budget. If it is your goal to put some money away each time you get paid, then the easiest way to go about things is to have a specific amount that is automatically deposited into a savings account with an attractive interest rate.
That way, you have the incentive and the comfort of knowing that the money is being saved and even available in case of an emergency.
Another great way to save is to contribute regularly to your superannuation, particularly if your employer will match a certain percentage of your elective contribution. Please note however that once money has been invested into your superannuation it is locked away until you are eligible to withdraw it.
4. Keep an Eye on Late Fees
One of the biggest budget busters comes in the form of avoidable interest payments and late fees especially associated with credit card liability. Paying bills and fines on time is central to keeping to a tight budget.
The best way to prevent this from happening is to pay for everything on time and in full through an auto-pay system for bills that come up with regularity. Alternatively you can set up a reminder system for yourself.
5. Take Seasonal Expenses into Account
There are always some expenses that only come up once or twice a year which if not accounted for can easily catch you off guard. So keep in mind costs such as:
- School or university expenses
- Gym fees or sporting registrations
- Christmas and birthday gifts
- Car or bicycle services and repairs
- New clothes or equipment you may need
- Medical expenses (such as regular dentist check-ups and so on)
- Pet expenses (such as insurance, regular vaccinations and checkups, and so on)
These types of expenses will be drastically different from person to person. Recognising and allowing for them will help prevent any nasty surprises.
6. Online Budgeting Templates
If, like many, your life is organised online, then there is a range of phone apps and computer programs that you can use to develop and manage your budget. Budget programs can speed up the time it takes to create a budget, be used to send alerts when things aren’t going to plan, or to set reminders to make payments.
For many though, the best budget is a simple budget, and for that there is nothing wrong with an easy, ready-to-go budget planner template.