How to Budget 101: A Beginner's Guide To Saving

Need help with budgeting money? Discover what your main savings goal is, and how you can best achieve it. Sit down and write down your financial goals. Maybe you’re saving for a holiday, or just want to have a little extra each month so you aren’t living from pay cheque to pay cheque.

Below are just some of the reasons people decide to track their spending with a monthly budget:

• To reduce overspending in problem areas.
• To stay on track with long-term goals.
• To reduce conflict between partners.
• To ensure that your spending is reflective of your values.
• To break the cycle of living pay cheque to pay cheque.
• To live within your means.
• To get out of debt.

First, add up all your income so you can see how much you have coming in each month. Make sure you include all of your income, including your salary, money from any side hustles or second jobs, child support or alimony arrangements, business income and any income you receive from investments. If your income varies from month to month, or you are working freelance, one way to get the most out of your budget is to essentially pay yourself a salary. This way you can decide on a set amount you are comfortable with, and save anything leftover on a good month to cushion you through a bad month. This will also help you to curb any unnecessary spending, and help you to feel more financially stable.

Once you have noted your income, you can start to create a list of outgoings. Once you have this all noted down, you can start to see what is realistic for your budget. Start by tracking your spending for 30 days, or looking at your spending for the previous month. There are a number of ways to track your spending:

• Spreadsheet budgeting.
  Whether you’re a spreadsheet wizard or an Excel beginner, entering your purchases into a spreadsheet will give you full visibility on your spending. This can be time-consuming, and you may forget now and then, but will ultimately give you the clearest view of your finances.
• Note it down.
  Keep a notebook to hand and note it down whenever you make a purchase.
• Budgeting Apps.
  There is a range of budgeting apps available to make it easier to track your spending by linking your bank accounts and credit cards. Be sure to link all of your accounts to ensure you get an accurate view of your spending.
• Bank Statements.
  Review your bank statements and credit card statement to track your spending across more than one account. The only downfall with keeping a budget this way is the statements may not have your transactions detailed as you would like, and you may not remember what certain transactions were for, so it may be better to just use your bank statements as a starting point when you are putting together your budget.

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Personalise your finance goals. Think long-term and set actionable, realistic goals. The key to budgeting is to be specific with your goals and have a solid deadline to work towards. Instead of saying, “I’m saving for a trip overseas,” you should say, “I’m saving $10,000 by June for a trip overseas.” Cementing your goals will give you the motivation you need to make your savings dreams a reality, and give you something more concrete to work towards.

Some popular long-term finance goals are below:

• Saving for retirement
• Education costs
• Paying off debts
• Travel and holidays
• Buying a house
• Buying a new vehicle

With your income set out in front of you, it’s time to lay the foundations for your budgeting and forecasting set up. It’s important to choose a budget management system that works for you, taking into account what you value.

Below are two of the most popular simple budget systems you can implement today!