Now’s the time to get it right.
Budgeting isn’t a popular topic of conversation. You might chat over celebrity hairstyles, news events or recipes with your friends and family – but we don’t often sit down and discuss budgeting tips. Which might be part of the reason why so many of us struggle with it. If you’re repaying high interest debt likeor and struggling to make ends meet then budgeting might seem pointless – but it can help you change your financial situation, whatever that may be.
Why budgeting matters now
Budgeting has always mattered but there are some very good reasons why now is a good time to master it.
• House prices are going up – if you want to buy a home of your own any time in the near future, clever budgeting is what will get you there.
• Debt is more common – the average household owes roughly $10,000 and debt is increasingly becoming a way of life. Whether you want to avoid getting into debt, or you want to save your way out of it, budgeting provides a simple and effective method for success.
• University costs more than ever before – educating our children is getting more expensive by the year and budgeting will help you ensure that this spend is covered.
• Retirement is more expensive – experts predict we’ll need more cash for our retirement but many people currently have no retirement savings. Budgeting means that you can start putting money aside for old age now.
How to turn your budgeting habits around right now
Stop putting it off. Now is the time to take control of your finances and start creating the future that you want.
Start simple. Sit down and make a list of what comes in to your account every month, as well as what goes out. Note regular payments, ad hoc payments, and divide everything into ‘essentials’ and ‘extras.’
Get some help. Whether you speak to someone you know, look for support online or download an app to help with your budgeting, sometimes it’s necessary to bring in an outside influence to kick-start better budgeting habits.
Stick to it. Half the battle with budgeting is staying motivated. Whether you agree a household budget with a partner or housemate, or set yourself daily reminders not to overspend, tackling those mental obstacles that stop us from being good with cash is an essential step.
Where budgeting could take you
Knowing how to budget effectively could help you to turn your life in a new direction. For example you can:
• Stop living under the pressure of debt that you can’t manage
• Start understanding debts better – which cost the most, which are the most helpful and which need to be paid off first
• Avoid living from week to week never knowing how much money you’ll have
• Be able to meet your outgoing payments and liabilities without overstretching
• Stop incurring fees and charges for going over limits or missing payments
• Create the financial future that you want to have, from travel in retirement to owning a house and having a family