A 7-step guide to getting your new year’s budget in order!
2019 is here so getting your new year’s budget in order is vital before the year passes us by. 12 months from now your financial well-being may very well rely on the decisions you make here and now so why not make them wisely with the help of a budget?
If you don’t have a budget, here’s a good place to start – with a GetBucks-approved easy-to-use budget to get your finances in order.
- What is your income after tax? Impressive or not, it’s yours and it can work.
You know what you earn each month so let’s get it out of the way. Whatever it is after tax, put it down. It’s the base from which all other expenses will be subtracted. There’s good news though – a smart budget can make it go further and look a little more impressive.
Now, let’s work from here…
- What are the fixed costs you cannot really change – insurance, schooling and the roof over your head.
How much do you spend on the things in life that you cannot avoid? Now, subtract them from your income as write-offs: Your home loan, your medical aid and all those costs that come off your account every month.
But, ask yourself: When was the last time you called for a premium re-evaluation? Surprise, surprise: Some essentials could change after all.
- The essentials you can change with smart planning – food, fuel and the clothes on your back.
Other essentials like the food you buy are unavoidable, but can they be maximised? Subtract them from your income according to what you’ve already been spending on them over the past few months. Take an average. Now, set yourself new targets, but be realistic. A budget always should be realistic.
Often changing brands or shopping habits can bring these numbers down easily. Then, there’s fuel: Have you considered public transport or a lift club? These days it makes a whole lot of sense if you want to squeeze even more from your budget.
- Debt – pay more than you need to. Ugh.
How much does debt cost you monthly? If you’re in it, you’ll probably think too much. But, this essential is best subtracted from your income ASAP to get the bitterness out of the way. Here, do your best to pay a little more if you can to get things down quicker.
Set up a debit order and wave goodbye.
- The emergency fund – the most important fund to keep your budget in working order.
When an emergency bites, your budget goes out the window. But, it’s possible to avoid this with smart planning and a little emergency fund. So, do your future self the kindest favour and set aside an emergency kitty for the inevitable time that you’ll need it.
Whether used for settling excesses, fixing tyres or putting teeth back together, money subtracted for it now is thinking ahead.
- Savings and Investments – every budget needs them and so does yours.
You’ve heard it a million times: Do you have a savings account? Well, if you don’t, take what you realistically can from your income and put it aside. Like many of the other points, setting up a debit order is probably easiest so you don’t forget. This is important for your long term goals – like saving for a holiday or a car, or perhaps a ring…
- Are you not entertained? Whatever’s left is yours!
When all the subtractions are done, you should hopefully have some money left to spend. If you’ve been disciplined and kept that budget in check, this amount should be consistent. Importantly, this is an area in your budget that shouldn’t spill over. Don’t get into debt to maximise it and don’t compromise something else for it.
Of course, this amount is yours so who are we to tell you how to spend it? This is your entertainment after all – so go on, spoil yourself!
Drawing up and sticking to a budget isn’t hard. All it needs is routine and discipline to make sure that you’re spending where you NEED to and not where you WANT to.
If you’ve got all your bases covered and your spending in check, a smart budget can help relieve long term financial anxiety and help achieve your goals.
So what are you waiting for? Draw yours up today and stick to it like glue.