The reason why most of us get into debt or face financial problems is because we spend more than we earn. Sometimes an unexpected event may cause havoc with our finances.
The key to avoiding debt problems and being financially prepared for life's unexpected events is to have a budget and to stick to it.
What is a budget?
A budget is simply a money plan. It is about identifying how much you earn and how much you can spend and on what items.
For example if your take home pay is $850 per week then that is your starting point. You will then need to list your major expenses such as rent or house mortgage; food expenses; car expenses; medical; clothing cost etc. If this exercise shows that you spend more than you earn then you will need to review your budget and identify those items where you can cut down your spending.
Make sure that you include all your expenses. Don't forget trips to the hairdresser, car wash, trips to the coffee shop and all the other small things that are often overlooked. Have a look at the Fox Symes Personal Budget or the Budget Planner Calculator - use it to take control of your money.
Budgeting has to be done honestly if it is to be effective. If your assessment is thorough you can have control of every aspect of your finances. We also suggest that you review your budget every couple of months to ensure you stay on track and remember that if you have scheduled to cancel an extra expense (such as an unused gym membership) don't forget to do so.
What are the benefits of a budget?
Once you draw up your budget all you have to do is stick to it for it to work. If you do this you will be on your way to reducing or even eliminating wasteful spending because you have taken control of your money. This means you have more money to spend and more money to pay off your debts and most importantly you are on your way to creating savings.
By following a budget you know which expenses you will have to meet and you are prepared for them. Budgeting actually gives you more money to spend because you begin to spend your money more wisely.
Budgeting takes the stress out of money management because it:
- Helps you to keep track of your expenses
- Helps you to trim your expenses
- Allows you to pay off your debts more quickly
- Allows you to save for big ticket items such as a holiday or a new TV
- Creates financial discipline which leads to wealth creation.
If you are living from pay day to pay day and constantly worrying about money then now is the time to stop. Controlling your spending is easy to do if you budget. Start today and use the Fox Symes Personal Budget or the Budget Planner Calculator to help you.
If you are in debt and want to know more about the solutions available to you contact us on 1300 098 127.
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