Budgets are sexy.
So said Galileo Capital Personal Financial Advisor Warren Ingram.
Budgeting is important for everyone; it sets the financially free apart from those who are in financial trouble.
Love fancy takeaway coffees?
A good budget should help you buy them.
Budgeting can make it happen.
It is important to understand, and to write down, you trade-offs.
If you love expensive takeaway coffee; what are you prepared to reduce, or sacrifice, in order to have it?
Similarly with holidays; are you, for example, prepared to drive an old car to afford them?
Tips to budget well:
Review the past few months by looking through your bank statements. Many people budget by writing down what they should be spending, not what they actually spend – and often the two are very different. This is time consuming. However, once you have set it up all properly, it will be easy to update. Review your budget annually, at the same time, perhaps after your increase at work. Be realistic; otherwise you won’t stick to it.
Depending on your financial goals; scrutinise your budget and see where you could cut costs and prioritise your trade-offs, but don’t be silly (do not cut car insurance, etc.)
Set fun goals (such as an overseas trip, or a new car) for yourself as part of your budget.
- Then, think about the next 12 months and add any new expenses that you think may arise. Are you planning on having kids? Planning a wedding? Start considering these expenses now so that you aren’t overwhelmed when they suddenly start adding up.
Ingram suggests checking out this US blog entitled “Budgets are sexy”.
For more detail; listen to the interview in the audio below.
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