This is a question which plagues many families and most people have a rough idea of why they need one, but do they have one that works and is implemented?
From our experience a lot of families will claim they have a budget but when we work with them we find this just isn’t true and by making a plan, they can often improve their financial situation massively and in addition make it easier to save or reduce unnecessary costs.
It can be helpful to also locate a Free Budget Template.
If your family is wanting to buy their first home, get ahead financially, reduce debts or even save for retirement then you definitely should consider making a budget. This will genuinely make massive changes when it comes to your life and also financial habits, however the main point and most important thing about implementing a budget and actually sticking to it is mindset. When you aren’t ready to make a budget or you aren’t ready to stick to one then there is no point as you will just be paying lip service to the financial gods and not actually sticking to the gospel and breaking the proverbial budgeting commandements.
First thing to focus on with a budget is a list of current expenses, once you have made a list of these then you can start to eliminate costs and things you may need, things we commonly find that people may spend too much on are:
- Mobile Data – if you are using too much internet on your phone consider turning this off, or alternatively switch your family to a plan, there can be easy and affordable ways to use your phone which may be more beneficial.
- Sky TV – in this day and age of Netflix and video streaming you may not need a Sky subscription and often a lot of the channels that you pay for you may not even watch, we managed to help once family save nearly $150 a month by just eliminating this from their expenses.
- Eating out and entertainment – we see a lot of families spend in excess of $100 a week on addition food and dining out, along with the costs of going to bars or nights out, there are many ways this can be reduced, by packing your own lunch and preparing food at home, along with on nights out taking a small amount of cash instead of paying for drinks on an eftpos card, all those beers does add up.
- Keeping up with the Jones’ – one other thing we notice is a lot of clients will buy high end clothing, branded items and other expensive goods which are outside their budget and typically will put these items on finance or credit cards. There are many ways to still enjoy life on a budget, such as having a clothing savings account and then using only that to buy clothes or in turn, buying items online or when they are on sale, one family we work with does all their shopping online when the Black Friday or Cyber monday sales are on and this allows them to buy what they need at massively reduced prices.
After you’ve started to establish some ground rules and plans around these expenses and things above, then you need to start working out all the numbers and writing a budget, remember the best way to do a budget is weekly and break monthly items down into a quarter that way they still fit within the system, this can also work with yearly things and biyearly things too, so for a year just divide the amount by 52 and so on. A great tool for a budget is a yellow legal pad or excel, but many people do want a little help, community support via the citizens’ advice bureau offers budgeting help, but there are also many great online tools, the best we have found is Sorted.org.nz which has many tips, books and also a specific section on budgeting that may be a great starting point.
Remember success starts with the first step and that is why you may not have the perfect budget day one, but if you keep trying and planning eventually this will make a huge impact on your life and point you and your family in a positive direction for the future.