Tips when creating your budget

  • Determine your goals. Be sure to have an ‘emergency fund’ as a part of your goals, if you don’t already have one. Many investment advisors recommend that everyone set aside three to six months of income for an emergency, such as job loss.
  • Separate the things you need from those you want. Be sure to take care of your needs first. If you find that you are spending all of your income, you will have to find a way to cut back on your expenses or to earn additional income. Watching for the ‘little things’ that eat away at your income and wealth. Make sure saving is a high priority. A strategy of many successful savers is to always ‘pay yourself/your family first’. To do this, set aside savings before addressing any other needs. To help them succeed, some people ensure that when they are paid, a portion of their pay check is sent directly to a savings account.  
  • Pay off credit card debt as quickly as possible. Aim to never spend more on your credit card than you can pay off in a month. When prioritising your goals, if you have balances on your credit cards, paying them off should be a top objective. Very few investments, if any, will ever generate sufficient returns to offset what a credit card will take out of your wealth through interest charges. 
  • Remember irregular expenses. For many people and families budgeting is easiest to do on a monthly basis, as many bills come due on a monthly cycle. Be mindful of expenses that are not due during your regular budgeting cycle. For example, in your birthday month you may have to pay to insure and license a vehicle. Plan to have money set aside for events like these. 
  • Track your expenses. Keep a record of what you are actually spending. This will help you to understand your spending habits and provide excellent information should you need to adjust your budget to be able to save or invest more. Keep a notepad and pen handy, or download a mobile phone app that will help you to record your actual spending right away. Don’t wait too long to record expenses either, or you may forget them. 
  • Don’t overlook the small expenses. You might be surprised at how much you spend on the little things, like those extra data charges for the movies and music you download on your mobile phone. Cutting back on a cup of brand-name coffee every day could save you thousands of dollars in the long run. Now that you’re tracking your expenses, look at where you can cut back so you can have more money to achieve your dreams. 
  • Get into a routine. Review your budget regularly and make managing your finances a matter of habit!