If you discovered a business owner was operating without a set budget, you’d probably think he/she was incompetent or not taking his/her financial obligations seriously. Still, many households don’t have a budget in place. When you think about it, though, running your household is not dissimilar to operating a small business. You have an income, expenses and, hopefully, something left at the end of the day to invest in your future. After all, investing in yourself is important whether you choose to use that extra money to grow your savings or retirement fund, follow a sport or hobby, plan for holidays or higher learning, or just for general entertainment. But it takes discipline to plan for the future, and this is where a budget becomes invaluable.
A personal budget helps you more clearly plot your financial direction and stick to your long-term plans. So why do most people remain resistant to the idea? Because tackling a budget can feel overwhelming; so we tell ourselves we’re too busy or that our life is just too complicated to “deal with all that”. The truth is we cannot afford not to deal. But you don’t have to do it alone. You can call on a professional financial advisory service – like SMART Business Solutions – to help you design a personal budget plan that will bring you closer to making your future dreams a reality.
Most Of Your Money Is Already Spoken For
As far as most of us are concerned, a large portion of the income we receive is already designated to cover our mortgage and loan repayments, utility bills, and insurance premiums. In other words, what you may consider budgeting is really honouring the financial commitments you already have. The first step in setting up a personal spending plan is tracking these commitments so you can determine what’s left for your day-to-day living expenses.
Your Day-to-Day Money Is All Over The Place
Typically, your day-to-day living money is spread about which is what makes it more difficult to keep track of. Some may be in the bank. Some in your purse or wallet. And some with your partner or children, if you have a family. With that in mind, you need to devise a system that allows you to easily track your living expenses. This doesn’t mean you need to keep track of every single cent. Rather focus on identifying your main day-to-day expenses – such as fuel spend, groceries and other discretionary expenses – so you can make allowance for additional minor expenses. You can keep track of your expenses day-to-day using a spreadsheet or Xero does offer a ‘mini’ version cashbook for only $10 per month which automatically access your transaction feeds, so you don’t have to enter the data manually.
Keeping A Positive Attitude
One of the major reasons – if not the main reason – many people fail to follow through with their personal budgeting is their attitude. If you approach it as a penny-pinching exercise rather than a way to help you realise your financial goals and dreams, chances are you’re likely to stay committed.
So if you’ve ever tried to devise a personal spending plan and given up in frustration, think about it like the difference between grudgingly going on a diet and choosing to eat more healthily. The first approach has a negative and restrictive connotation. While the second approach is more positive and makes allowance for the occasional indulgence without sacrificing your end goals. The bottom line is that if you want to increase your chances of creating a successful personal budget – or spending plan, if that sounds more positive – you need to work on your attitude first.
Where Did The Money Go?
Yes, money is a means to an end. It’s also a “tool” we can use to make things happen. But, the cold hard reality is that until you have a definite idea of where your money is going, you no hope of using this tool more effectively. Which is why a personal budget is so important. It gives you a very clear picture of where your money is going so you can consciously take charge of your finances. And save for the things that matter to you: a new home or car; tertiary education; comprehensive health care; overseas travel; a comfortable retirement; or whatever your personal goals may be.
Reaping The Rewards
A successful budget is based on a few universal concepts, but most importantly it should be simple to use and suit your specific needs. The more user-friendly it is, the easier it will be for you to stick with it. So avoid a one-size-fits-all approach. A realistic budget that takes into account your personal circumstances is more likely to keep you motivated. This is where the services of an independent financial advisor – such as SMART Business Solutions – can be of great value. And before long, you’ll be reaping the rewards of your commitment.
3 Steps To Effective Personal Budgeting
Approach your personal budget with a can-do attitude, and you’ll soon see the difference a conscious spending plan can make in your life. It’s up to you to decide what you want to achieve. And you can, with a positive attitude and a personal spending plan.
Need help with your personal budget? We can assist you to examine your spending habits and set personal financial goals so you can make your future dreams a reality.
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The updated alternative tests released by the Commissioner of Taxation are broadly similar to the alternative tests that were released in connection with the original decline in turnover test. However, there are some key differences.
To access JobKeeper payments from 28 September 2020, there are three questions that need to be assessed:
Is my business eligible? Am I and/or my employees eligible? and What JobKeeper rate applies?
We’ve summarised the key details in this update.