It can be difficult when creating a budget to know where to start. Often people create a budget then not follow through with it. This article will go through 6 easy steps to help you create a budget and stick to it.

Identify Income

When creating a budget, it is important to know what income you currently must cover expenses and save. When recording income, it will be best to see how much you make either weekly, fortnightly or monthly. If you are a casual working find the average you make each month and calculate best and worst-case scenarios. Don’t forget to only record you take-home income after taxes.

Calculate Expenses

It is important to track you’re currently spending and catergorise it. This can help you decide which areas you are spending too much or too little in. Fixed expenses such as car repayments, rent or mortgage repayments cannot be altered but food expenses and entertainment can be easily adjusted to help you save more.

Set a goal

Having a goal or goals can help keep that drive to stick your budget. Make a list of short-term goals (1 year) and long-term goals (more than a year). This can help you calculate how much you are wanting to save. Having goals can help make the budgeting process easier as you know why you are budgeting.

Decide a method to track your budget

When creating a budget, it is important to track it. There are many online budget templates and programs that can assist in creating a budget tracker. Tracking a budget helps you decide if there are any changes you need to make to achieve your financial goals.

Adjust habits if needed to follow a budget

When you have created your budget, you might find that you must change some of your living habits to succeed in your financial goals. These habits could be something simple such as switching packaged foods to fresh foods to decrease your weekly grocery bill or cancelling a gym membership never used.

Monthly follow-ups to see if you’re on track

It is good to follow up on your budget regularly to make sure you are on track to achieving your goals. These monthly checks can see if you might need to adjust your budget more to meet your saving requirements.

Creating a budget for the first time can be difficult and sticking to it can be even tougher. Hannans360° can assist you in creating a budget and provide professional advice on the best and easiest ways to achieve your goals.

We hope these tips helped you create a good budget. For more information on effective budgeting, contact us on (07) 3806 4484 or send an email to gday@hannans360.com.au

Categories: Budgeting