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How to start budgeting
When it comes to money it's not what you make, but how you use it that counts. And there’s one main way to master your money: spend less than you earn – easier said than done, we know. Whether your take-home income fluctuates from week to week, or you know your salary like the back of your hand, a little bit of budgeting can go a long way.
We know that tracking your expenses won’t exactly make you leap out of bed in the morning. In fact, budgeting has got a bit of a bad rap. Many people think it takes too long to make a budget, or they just don't have enough money to make it worthwhile.
But the truth is that it’s not just about spending less, but about really knowing where your money is going so that you can manage your everyday expenses a little more easily.
What’s the first step you need to take? Track your expenses so you can see how much you’re spending (and where), then you can whip up a bona fide budget to start spending less than you earn.
Brain hack
It turns out that most of us are blinded by an 'optimism bias' that makes us overly positive about our financial future. This means we think that everything will turn out in our favour – our bills paid, needs met, with little treats as well – rather than planning for unexpected or worse-case scenarios. It's what stops us from building a budget or sees us spending up in the first few days after our pay hits. Many of us assume that everything will be fine, and the money will keep rolling in.
The only way you can beat this bias and get on top of your money is to take off the blinders and take a good look at how you’re actually spending your money – with the goal of looking for areas of your expenses that can be reduced or cut out completely.
The information set out above is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before acting on the information, you should consider whether the information is appropriate for you having regard to your objectives, financial situation and needs. By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.