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Why budget?

There really is no secret to financial success. With a little discipline and budgeting, financial goals can quickly become reality. A budget is a great way to track your monthly income and expenses because it gives you a clear picture of where your money goes and how much you could be putting aside to reach savings goals.

A budget is a simple financial plan that tells you at a glance if you're spending more on things you need—essential items like food, shelter and transport—or things you want, like a new TV, mountain bike or nicer car.

It's a known fact that most of us live at least a little beyond our means, which can land you in hot water if unexpected bills come in or you lose your job.

Having a budget helps you take control of your finances and avoid living from pay cheque to pay cheque.

A budget is a tool, not a shackle!

Don't make your budget too restrictive-taking the fun out of life. A good budget can free up funds for the things that make life more fun, like holidays, CDs, cars and clothes.

Tip
Setting aside a few hours to draw up a firm but flexible budget could improve your cash flow! You may be quite surprised to see how much you spend on going out, buying lunch or hobbies!

How much do you spend each month?

Click on the Budget Planner button on the right to work out your monthly (or weekly or fortnightly) budget.

Working out how much you spend on things like entertainment can be tough because there is no set pattern. By giving yourself a certain sum of money each week or month for such expenses you can reduce overspending.

Tips for shopaholics
Before you blow your budget ask yourself:

• Do I really need it?
• Will I really use it?
• Will I still like it next month/next year?
• If I don't buy it now, do I want it enough to make a special trip later to get it?

10 ways to cut your expenses

1. Draw up a realistic budget and stick to it! (Don't forget to put aside 10% of your income for savings).
2. Make your own lunch. It can save you $1,000 or more a year!
3. Avoid temptation by limiting your access to money. Withdraw a set amount of cash each week and leave your cards and cheque book at home.
4. Do you really need a car? Catching one or two taxis a week costs less than registering, insuring and maintaining a vehicle. Use public transport-you'll save on petrol, parking, maintenance and someone else is worrying about the traffic.
5. Shop around before you buy. Keep an eye out for sales.
6. Try buying second-hand goods at auctions or garage sales. It can be great fun and you might find a bargain!
7. At the supermarket compare products and brands, try a few of the no-name labels. They're much cheaper and the quality is often the same. Also, don't go shopping when you're hungry!
8. Plan meals ahead of time and make a shopping list before going to the supermarket. Studies prove that shoppers without a list buy more items than those who come prepared.
9. Avoid making major purchases on impulse. Give yourself a day to sleep on the idea and consider how you will pay for it, if you really need it or just want it, and if you could find it cheaper elsewhere.
10. Carry a small notepad with you and keep track of everything you buy over a month. You'll be surprised how much is unbudgeted for.