If 2022 is the year of your financial freedom, you’re going to need a budget.
I know the thought of setting up a budget is about as an attractive idea as cleaning the gutters, but it is the backbone of your financial goals. Plus, we’re going to give you all the steps to make it as easy as falling off that ladder while cleaning your gutters. (Editor’s Note: Please don’t do that. Always work safely.)
Even if you already have a budget, there will be plenty in this article that can help you reassess your budget and maybe find some room for improvement.
Hello, Income, my old friend…
We have to start your budget somewhere, and that will be with your best asset, your Income. You should look at your Income just like the first time you laid eyes on your true love. It is something to be admired, respected, and lovingly watched grow into everything you need and want. Sorry, it must be getting close to Valentine’s Day and getting all Miles & Boon with that description.
You need to know how much money is coming in for your budget to work. Count every cent. Your primary Income, investments, side hustles, interest from savings, loose change found in the sofa, and that $50 note that you forgot about in your winter jacket. All of it. Pop it in the budget, and you’re already off to a fantastic start.
Oh, yes, spending, we meet again.
Now that you have your Income mapped out and the balance of your budget is looking good, we need to make it realistic by adding your expenses. Fear not; this is not all money that is just going into the winds of nothing. Your spending also counts for the money you invest, put into your super, or savings that you will not touch. Make sure to dig through your credit card or bank account expense statements to know where all of your money is going. Be on the lookout for cheeky bank service fees as well, as they might be small, but they add up.
It’s all about the goals!
Let’s focus on where you want to go—paying off a debt? Investing? Holiday? Nothing is off-limits. Put your goals into your budget and plan to add money to those goals each week.
Plan your route!
A plan is the best way to ensure that your budget stays on course. It’ll be the place where you can find the extra couple of dollars that you spend on that weekly, or daily, coffee could be put towards something more worthwhile.
One of the reasons that diets fail is that if people have a “bad day”, they think it’s all over and give up. The same goes for budgets, but you don’t have to be so hard on yourself. Things come up, and those things always cost money. You have to learn to be fluid with your budget so that you are never left feeling like you failed.
Be like Santa.
When we say “Be like Santa”, we don’t mean giving all your money to the world’s children in one night. That would be weird. No. We mean to check that budget twice, three times, and keep checking it. There will be excellent parts and naughty parts of your budget, and you have to find the balance and make it work.
There are many great budget templates online that can help you get started with the actual formatting of your budget. However, these and this blog are just tips and tools to help you. You will have to put the work in to ensure that 2022 is the year of your financial freedom!
If you need help sorting out your budget, one of our experts will gladly help you. You can contact them for a risk-free assessment.