Glen Forsyth
13 November 2020
A budget is basically a money plot that helps you to do and reach your financial goals overall. A fantastic budget helps you to do a number of things. Let’s discuss better budgeting for Australian families.
These help you to establish and regulate your funds, set and achieve your small and long-term financial objectives and also helps you to make advance spending decisions. Budgets also show you what areas to cut back on or eliminate all together to help you save more money for other goals and objectives.
One of the main reasons for budgeting is so that you can have a hedge against unforeseen financial or catastrophic emergencies. Budgets also help you to keep abreast of where your money is going.
Simply place, a budget is an income estimate and spending plot based on your monthly home expenses and financial liabilities.
The first step to take when budgeting is to define what your fixed expenses are. Your fixed expenses are those things that you make payments on every month like automobile payments, mortgage payments, life insurance, and etc.
Likewise, you must review your expenditures thoroughly over a few months to figure out what you spend your money on and cut out unnecessary expenditures. Through proper review of your monthly expenses you will be able to determine your spending patterns so that you can curb terrible spending habits.
Let’s assume you have a steady monthly income of $6,000. You should subtract all your routine monthly bills first. Then, subtract your other bills from the amount of your income. Set up your budget with the remaining balance. Instead of blindly allocating money to specific categories, start setting percentages for each category and adjust them based on a three month trial basis.
It may be very sobering to find that you spend 2% of your income on your daily caffeine intake. This knowledge alone might make you start bringing a thermos or avoid buying your soda from vending machines.
In order to be strategically successful in budgeting, you have to become incredibly determined not to waste money. Formulate reasonable budget goals and plans, then strictly abide by them as much as you possibly can. But, take into account that you will not be the perfect budgeter overnight. Successful budgeting takes very routine and measurable steps. You may want to get a small notebook to track your expenditures.
Otherwise, how will you know where your money is going?
Four tips for Better Budgeting for Australian Families
Have excellent money management sense
A mature attitude is highly essential. Reach an agreement, compromise and know the financial payoff of reducing your expenditures. Know that you won’t make any headway if you do not make some small sacrifices here and there.
Review your financial situation
Take your notebook and write a “T” down the middle, (This method is courtesy of Ben Franklin). Make a listing with the pros of your earnings on the left side and the cons of your overheads to the right. If there is a deficit, determine what you are going to need to do to cut out the weight and increase your cash flow.
Know wants and needs
Make sure everyone in the family understands the difference between luxuries and necessities. If there is a need make sure that everyone lists them on a common list that everyone can see showed in a prominent place like your refrigerator.
Agree on what is really needed and cross out unnecessary large ticket items. You may end up with a running list where half of the items are crossed off. This is okay. It will teach younger family members about saving for the things they want that don’t meet the family NEED criteria.
Be frugal however not cheap
Remember, that you have to always buy twice as much of cheap things to make up for their inferior quality. You can have fun with a small bit of money or without spending money at all. Rather than going shopping, play with the kids at the beach or at the park. Tell your kiddos that you are taking them on a photo shoot at the local park and let them model their favourite outfits or jerseys.
Then download the photos and place them in the family scrap book. These are the moments that the family will cherish. Spending quality time together as a family is one way to save money and make memories at the same time.
Better Budgeting for Australian Families
Remember budgeting is an effective and fundamental tool that every family should regularly practice. Consider it an absolute must or you may have to pay the consequences for years to come. All the best with better budgeting for Australian families.
