No great goals were ever achieved without a plan of action (don’t quote us on that). But in all honesty, it’s better to have a plan of action if you want to get serious about your savings.
The good news is, you’ve already got a head start by getting your savings goal and timeframe locked down. The next step is to set a budget. We recommend going monthly – it’s an easy way to break down your spending without getting too consumed, but you can plan for whatever best suits your pay cycle.
Before you start panicking about having to do maths for the first time since high school, take a deep breath. Creating a budget is actually a piece of cake, and it’ll save you countless money worries in the long term.
This week's key points
- Get by with a little help from your friends
- Honesty is the best policy
- Don’t stop ’til you get enough
- Set your sights
Get by with a little help from your friends…
That’s us, by the way.
We’ve got a super handy budget planner tool and it does all the hard bits for you! Here’s how it works:
- Enter your income
- Input your regular expenses (rent, insurance, Netflix, gym memberships, public transport, etc. – these are all split out into sections for you already)
- Understand what you can afford to save each week, fortnight, month and year!
It’s that simple.
Honesty is the best policy…
What we mean is, the more honest and accurate you are with what you input into the tool, the clearer you’ll truly understand what you can afford to save. You might be surprised!
So, put in a little extra time to go back through your expenses over the past month or two – chances are you might be surprised at where your extra money is going.
Don’t stop ’til you get enough…
Don’t stop here. Make yourself a spreadsheet and input all you’re spending each month, every month until you reach your savings goal. It’s truly the simplest way to catch yourself overspending. You’ve already accounted for all of your ‘extras’ from the fancy date nights to the extra pair of shoes – so there shouldn’t be much extra slipping through the cracks.
Spending $7 a day on coffee might seem like a small price to pay to not look like a zombie, but that’s over $2500 each year! This is also a good place to pick out what you’re willing to give up each month (maybe a subscription to Netflix and Stan isn’t necessary…?).
Make a list of things that you can live without and get them out of your life! It’ll be nice to see that monthly savings number increase as you do.
Set your sights…
Lastly, print that monthly budget sheet out and put it somewhere you will look at it every day. You can even write your budget in by hand if you’re really committed (and good at maths). The more manual you make the process the more the entire concept will stick in your mind and have an impact on the follow through.
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