Monday 4th May 2020
Making an effective budget and sticking to it are always easier in theory than practice. However, there are key saving tips you can use to create an effective budget that will start saving you thousands of dollars today. These saving tips are easy to apply and accessible to all no matter how big or small your budget may be.
Determine Your Monthly Expenses
The first thing you should complete before creating your budget is to determine exactly how much money you are spending each month. There are multiple ways to do this but the best way is to check your bank statements and receipts. You should add every expense up for the last 12 months and then divide that number by 12 in order to get an average monthly expense.
Determine Your Actual Income
Rather than just adding in your yearly salary it is important to also take into account less considered forms of income such as gifts of cash, online sales, interest and rental income.
If you have subtracted your monthly expenses from your monthly income and still have money left over then you’re already in a great position to put that excess into savings. If you have more expenses than income then you are going to need to set some saving goals. Ideally you would want to be saving 10-20% of your income every month so if you are in a deficit you need to take a look at your budget and see what expenses can be cut. Anything unnecessary or that you can do without such as an extra cup of coffee in the morning, or streaming subscriptions are great things to cut to get your budget out of deficit.
Saving money and sticking to a tight budget are hard but following these tips will make it easier for you to start saving money.
If you would like to learn more about creating an effective budget please get in touch with us today.