Masterclass, Money

Five Steps to creating your (achievable) budget

Published on May 24, 2016 10:17 am, by

Sticking to a budget can be challenging!  The simpler it is, the easier to understand and the more chances you have for success.

We think there are 5 things to do that will set you up beautifully to keep you on track –

Step 1: Set a goal

Before reviewing the figures, it’s a good idea to think about where you are and where you want to be.

Here are a few ideas to get you started:

  • Do you have high interest debt that needs repayment?
  • Are you saving to spend or saving to invest in your future?
  • What can you see happening in the next 2-5 years that you may need money for?

Before getting in to the dollars and cents, if you have a significant other take the time to chat and get on the same page. You may surprise them; so take all the time you need to align your goals.

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Step 2: Know your Income

Check exactly how much you earn. Decide on whether you’re doing an annual, monthly, fortnightly or weekly budget and translate all your income in to this one period.

Once your accounts are linked, you can quickly and easily access this account from your MoneyBrilliant spending reports.

Step 3: Know (and reduce) your Expenses

The easiest and most accurate way to do this is to use historical data for a baseline and then work out what you can adjust up or down.

Checking your spending reports in MoneyBrilliant will give you this information.

Grab a pen & paper and write down

  • Any services that you feel you can cancel or negotiate
  • Your top spending categories

Now highlight any services you believe you can negotiate as well as spending that you can reduce or eliminate.

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Step 4: Review and Action

Now you have an idea of where your money goes. Its easy to underestimate – by linking your accounts to MoneyBrilliant you will get an exact figure on where you spent your money over the last 1, 3 or 12 months.

Ask yourself this:

  • Where does your money go?
  • Have you identified negative spending patterns?
  • Were you surprised at what you were spending in any categories?
  • Go back to your highlighted figures and decide which one to action first

Take action:

  • Jump online or pick up the phone and compare/negotiate some services.
  • Cancel any services you can do without
  • Write down any spending you are committing to stop or change

Finally:

  • Work out if your net position is currently positive or negative
  • What do the changes you are committing to mean
  • What are you going to do with the difference
  • Use the MoneyBrilliant budget tool to forward plan your future spending

Step 5: Staying focused

You’ve done it. You’ve committed to change.

Right now while you are riding high on motivation its important to schedule in times to check in and make sure you’re on track.   Put it in your calendar and make sure that time is non-negotiable.

Progress can seem slow initially but in a few months you’ll look back and be rewarded by the success of tracking towards your goal!

Some more about MoneyBrilliant

MoneyBrilliant is a data aggregation service that links with your bank accounts and categorises your transactions for a consolidated view of where you are spending your money. You can also schedule bills and alerts to make sure you never miss a payment again.

We use your historical data to inform the future you about where to spend your money, and find places to stop spending and start saving. The first step to changing your spending habits is to understand what they are. MoneyBrilliant will help you do that.  

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Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.

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