NOW, SET YOUR BUDGET!

This step will involve you analyzing your financials and creating a PLAN because essentially, that’s what a budget is; a Financial Plan.

By budgeting, you can make better use of the money you already get – so you may not need to earn more money after all!

From your weekly income, you know how much money you can spend, and from scrutinizing your expenses you should now have an idea of what expenses you can cut and where you can save some money.

Use this information to set yourself expenditure targets – and stick to them! You’ll be surprised how quickly your savings start to improve.

And as part of your budget, you need to allow for:

• An allocation for your living expenses – weekly costs and the big bills that come in from time to time.
• Debt repayment – and make extra contributions if you can to reduce your debt faster. Savings and financial goals – whether you’re just saving for a rainy day or saving towards a specific financial goal, you need to allocate these contributions in your budget.
• Investments and retirement planning – put some money away for the future. One day you WILL retire and need to survive from your savings.

Don’t forget a Saving Plan!

What do you need a saving plan for? Saving money of course!

*Remember those financial goals!* but also remember to:

Save for a rainy day – those inevitable things in life that you can’t plan for. Put some money aside (in a separate bank account if necessary) to cover any unplanned or emergency expenses. If you do use this money, make sure you put the money back in when you can – for the next rainy day.

Save up for those big bills – do you groan when those BIG bills like land rates/ tax and car registration come around every year? You know they’re coming but still don’t seem to manage to be able to pay them. When you know about these big bills you can plan for them – put enough away into a separate account every week so that when these bills come in, you can breathe easy and just pay them without having to worry about where you’ll get the money from!

Save for a sunny day – and best of all, it’s nice to save up for some luxuries or fun things just for you and your family. What do you want to save up for – a holiday? Entertainment system? Boat? Using a saving plan will allow you to buy these things responsibly – ie without sending you bankrupt in the process!

And of course, save towards your financial goals 🙂

To prepare your own saving plan, just list down what you need to save for [and why], how much you need and when you need it by. 

You can then work out how much you need to save from your pay every week [just divide the amount you need by the number of weeks you have to save that amount]. And hopefully, this weekly amount can be accommodated by your budget! 

For example, if you are saving for a nice weekend to celebrate your wedding anniversary in 10 weeks’ time, and you want to save $1000 for the celebration, you will need to save $100 per week. Can you afford this in your budget? 

If it’s only a short term goal, you may be able to make some short term sacrifices [like cutting back on your daily purchases lunches for work] to help, but long term sacrifices may make you feel trapped by your saving plan – so make sure any plan you prepare is realistically achievable. 

And even if you don’t have anything specific to save for, start saving money anyway! Aim to save 10% of your net (after-tax) income every week if you can, and live off the remaining 90% – if this seems difficult, then aim to ramp up your savings by 1% every month until you get to 10%. 

Regardless of your saving strategy and financial goals, you MUST be committed to your savings plan, and stick to it every week. Don’t be tempted to dip into your savings account for other uses [unless it’s a REAL emergency] and be diligent with your weekly payments! 

Trust me – you’ll be a super saver in no time, with your new personal saving plan.