Budgeting money in 10 easy steps


Money comes and goes as they say. It’s far more rewarding to watch the cents stack up in your bank account as opposed to seeing them depleted each month. Let’s face it, living from pay slip to pay slip every fortnight isn’t such a great feeling. As we live in a society of ‘buy now pay later’, spending habits can often spiral out of control. Follow our simple guide on how to budget in 10 easy steps.

10 Top Tips:

1. Focus on savings

Start by checking how much money you have in your current account. You may already have a savings account setup, but could still use some help staying on budget. You’ll need to assess your current outgoings and prioritise on which items you can afford to cut your spending on. Substitute that cash being spent towards rash and unnecessary purchases, tally it up and have it directly deposited into a savings account or mutual fund. Wherever you decide to keep your savings, make sure you put the money into it every month – every extra dollar saved is better than spent.

2. Use cash

Psychology is everything if you tend to use a credit or debit card for everyday spending and you find it hard to keep on track of your spending habits. Instead, try taking out enough cash to last one week at a time. Make up your mind that the cash you have budgeted is assigned to things you can’t live without. It’s much easier to turn down an $80 pair of jeans when you don’t have the cash in your pocket instead of pulling out your credit card.

3. Cut out bad habits

Whether it’s alcohol, gambling or a penchant for shopping, if you do too much of either, you know how expensive bad habits can be. You don’t have to go 100% cold turkey on any of your guilty pleasures – whatever they might be. Just be conscious of how much you’re spending on unnecessary purchases. You’ll see the bills fall, but also feel your health and self esteem improve in no time. Also, think about things like health care expenses, and you may become eligible for lower insurance premiums.

4. Share the responsibility

Make sure you’re not the only member of your household concerned about your budget. If you’re working hard to save money, but your spouse is outspending and living beyond your means, you’re fighting a losing battle. Sit down together and hatch a plan to forecast how much spending money you should each have. Make sure you communicate regularly to see how well the saving is going. If the budget responsibility is shared equally, it’s far easier than going at it alone to make the difference.

5. Pay off your debt

If you have credit card debt, you make feel like it’s going to take forever to pay it off. But you can get ahead by choosing one card – ideally, the one with the highest interest rate, and paying off as much as you can on it every month. If you have other cards, pay the minimum balance on those until you’ve paid off the first card. Then opt for the next card and pay extra on it, while you pay the minimums on the others. If you pay only the minimums on all of your cards, you’ll be paying a lot more interest than you may realise. Consolidating credit card debt may also be a good option.

6. Keep your receipts

You probably monitored your expenses for several weeks to make a budget. Once the budget is made, it can be tempting to stop keeping up with every little expense. But keeping track really can help you stick to your budget. Save yo­ur receipts, and write down the places you spend money. You’ll be less likely to overspend if you realise how much money has actually gone through your hands.

7. Balance your chequebook

Do you balance your chequebook regularly? If not, it’s a good habit to start. If you’re on a tight budget, a couple of small mistakes can lead to overdraft charges and insufficient funds in your account. If you balance up every time you get a bank statement, you ­can make sure your balance stays in the black.

8. Monitor your spending

Look through your budget and all your receipts. Can you find an expense that can be cut? Maybe you could bring your lunch to work twice a week, or set up a carpool with a friend. Just c­utting out restaurant and fuel costs can help increase the amount of money you have available for savings and purchases.

9. Reassess now and again

It’s a good idea to redo your budget every 3 to 6 months to make sure it reflects your current income, spending and your goals. Once you are comfortable with using and sticking to a budget, you can update it less frequently, say once a year.

10. Be flexible

Remember that life is unpredictable, and things happen that are out of our control. When­ you make a budget, try to allow some extra money for variable expenses. Be gentle with yourself if you go over your budget sometimes. It can be hard to get back on track ­if you let yourself get too frustrated over a mistake or two. Follow­ing these tips can help you stick to your budget.

You can prepare for a major purchase without having to borrow more than is absolutely necessary, and you can feel good about keeping your finances under control. Make sure you update your budget regularly and prioritise your spending – know what is important enough to be worth your hard-earned money. Budgeting will come more easily the longer you stay with it, and you will reap the rewards in years to come. Above all, remember that budgeting is worth the effort. Keeping to a budget can make your entire life run more smoothly since so many things are affected by your financial status.

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