Budgeting

The word “budget” makes some of us cringe. It evokes images of deprivation and going without – like nights sitting on the lounge with the remote and a bowl of noodles or holidays in a hostel instead of a hotel – or even worse… no holidays!

But budgets don’t have to be like that. Budgets can just be a way of monitoring your spending, noticing the “holes”, and patching them.

Budgets are also great because the act of sticking to a budget helps us to achieve our financial goals sooner. So if you’re saving for a home, renovations, a holiday or you just want to manage your money better, here are some tips on how you can make a difference to your bottom line.

1. Food spending
This is often the biggest cost centre besides their rent or mortgage repayments, and it’s a really easy one to have a big impact. If you added up all the money you spend on food each month, you’d probably be shocked. The simple act of bringing awareness to how much you’re spending is a good first step. The second would be to record your actual spend. The third step would be to reduce spending. Simple things have an impact, like menu planning and then one weekly supermarket shop, taking lunch to work one or two days a week, having one less takeaway or restaurant meal a week, going to a BYO restaurant instead of a licensed restaurant.
Whatever your reduction strategy is, there’s often great savings that can be found here without the need for a diet of noodles!

2. Phone, data and energy
How long since you’re reviewed your regular costs such as phone, internet and energy? Phone and internet providers have become far more competitive over the past couple of years and if you haven’t made a call to your supplier lately, then you should. Same with your energy supplier. Asking a simple question such as: “Given my current usage, am I on the best plan that’s currently available?” could save you a significant amount of money each month. There will be zero impact on your lifestyle, but a positive impact on your budget.

3. Health fund and insurance costs
With your health fund, do you know what you’re covered for? Do you really need obstetrics cover? Is it likely that you’ll be in the market for knee replacement surgery in the next few years?
Check out your cover, get rid of what you don’t need, add anything that you might need, compare it with other health care providers and see if you can make any savings without impacting your cover.
Are your home, contents and car insurance with the same provider? You can often make savings by bundling your insurance. Make a call and find out if you can keep it all under the one roof with a saving.

4. What are you going to do with that pay rise?
It’s a bit of a phenomenon that we tend to adjust our spending to match our income. If we get a pay rise, it often disappears and we wonder how we could afford to live on our previous income. So next time you get a pay rise, why not have the extra income paid directly into your savings account or your mortgage offset account – or somewhere that it actually does some good rather than disappearing into lifestyle costs.

If we can help you get a grip on your budget, your cashflow and your financial management, we’d be very happy to arrange a time to meet.

Just call us on 0414 412 731.

Regards
Ian
ian@mcdadvisory.com.au

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