Budgeting

Why a Budget isn’t about Sacrifice

For most of us ‘spending’ is the first thing that springs to mind when we have money. So when a financial adviser suggests the idea of having a ‘budget’ most of us recoil in horror. Many people believe that budgeting is all about sacrifice – having to cut back on life’s luxuries today in order to save for our future lifestyle in retirement.

However budgeting isn’t really about sacrifice, it’s more about gaining a clear understanding of where your money is coming from and where it is going, so that you can begin to prioritise and plan for those things that are really important to you, both in the short term – such as an overseas trip or saving to buy a car – as well as longer term goals such as paying off your mortgage sooner or buying an investment property.

Regardless of whether you are rich or poor, our ability to create wealth is not so much determined by how much we earn, but to what extent we can spend less than we earn.

If you find the term ‘budget,’ too difficult to stomach, then perhaps think of it as a ‘savings plan’ or even a ‘spending plan.’ Regardless of what you call it, a budget is a simple financial plan that can tell you at a glance whether you’re spending too much on the things that you want, rather than on the things that you need.

Chris Jones, Director of HFB Financial Planning, is an experienced professional advisor –
an expert at debt reduction, wealth creation and a master at budgets.

 

Please call the office on 3286 1322 for an appointment with Chris –
he’d love to help you on your financial journey.

 

Budgeting tips: budgeting-101

  • Spend your money wisely. Make a list before you go shopping and buy only what you need.
  • Avoid buying groceries at convenience stores as they charge a premium for their products.
  • Consider shopping at competitively priced alternatives to Coles and Woolworths such as Aldi and Costco.
  • Buy non-perishable items in bulk when they’re on sale, such as laundry detergent, toilet paper and dishwashing liquid.
  • Many utility providers offer discounts if you pay your bills on or before the due date. Check to see whether your providers offer this incentive and consider switching providers if they don’t.
  • Never rush into a major purchase. If you’re looking to buy major appliances or electronic goods, wait until end-of-financial year or Boxing Day sales and shop around for the best deal.
  • Where possible, take your own snacks and lunch with you to work. This can save hundreds of dollars each year.
  • Instead of withdrawing and spending money as you need it. Withdraw a set amount each week and only spend what you have in your wallet or purse.
  • Don’t make your budget too restrictive – allow enough money for occasional treats and entertainment.