I’ve mentioned budgeting… I’ve lost you already haven’t I? If you’ve never had to budget before, just the reference to it might make you want to turn and run; particularly if you don’t consider yourself very good with managing money. But budgeting doesn’t have to be that scary.

In fact it can be quite easy, something that doesn’t require too much time or energy and in the long run, help you save for the things you really want.

Now in order to be budget-savvy, there a few simple tips that can help you build a budget and keep it updated.

  1. Think of money as a tool – Good or bad, for better or for worse, money is a necessary part of life. However, you need to think of money as a tool not the goal itself, otherwise you will never feel like you have enough.
  1. Keep records – You can’t start a budget without a record of your transactions, and more so you can’t keep a budget without continuing to record them. Mobile banking apps have made this easier and easier, particularly with more people using cards instead of cash when purchasing. For those times you do use cash, keeping receipts or making notes of what you buy will help you to understand where your money goes.
  1. Review your spending – Recording your spending is only helpful if you review your spending to understand where your money goes. Start by categorising or grouping purchases together, tracking where you spend regularly and whether there are any discretionary items that you could forego as part of a savings plan.
  1. Set yourself some rules – Now you know what discretionary spending you want to curtail, set yourself some rules to help with this. I have a coat-hanger rule, all my coat-hangers match and you can’t buy them anymore so I have a finite number. If I want to buy a new ‘hanging’ item of clothing I must recycle something already in my wardrobe to make room for it.  It doesn’t take long following this rule before you love everything in your wardrobe and don’t want to get rid of anything….hence you don’t buy that new jacket.
  1. Put it to paper – Writing things down is always a great way to make information more concrete. Having all the information on paper will let the numbers tell the story and give you a more complete picture of your finances. If you’d prefer to do this online, that’s fine but whatever you do, don’t keep parts of your budget in your head. Numbers become fuzzy and before you know it, you’ve forgotten.
  1. Create your template – Perhaps the most obvious tip we can give you, but also the most important. There are so many tools, templates and programs out there that can help you track spending in numerous ways. Do a search, check a few of them out and choose the best method for you.
  1. Plan, plan, plan – When planning out your budget, don’t just think about today and tomorrow. Think further ahead. Consider those expenses that come around monthly and even yearly – rent, insurance, utilities. That way each week you can start putting money aside for these so that when the bill turns up, you’ll be ready for it.
  1. Don’t forget incidentals – Life never goes a 100 percent according to plan, so make sure you allow some money for things like car or home repairs, medical expenses etc.
  1. Trial and error – You might get started with a particular structure and decide after some time that it doesn’t work as well as you thought. And that’s OK! If you’re struggling with it or lack motivation because it’s too complicated, then look for something different. It’s easy enough to change over.
  1. Commit – This is a big one! Being disciplined with your money is a habit you need to develop. But if you stay on top of your budget and commit to keeping it updated, it will just start to happen automatically.
  1. Know when you can splurge – This goes hand-in-hand with #9. Just as much as you need discipline, it’s also important to know when you can spend that little bit more. Allow yourself some small treats, maybe brunch with friends or catching a movie. Total denial will go the same way most diets go – you will feel overly restricted and then binge!

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