Make a budget they said, it’ll be fun they said.
If budgeting hasn’t been going as well as you hoped, you’re definitely not alone. There’s some serious skill required for sticking to a budget and not “dipping” (so to speak) into a savings or credit account but let’s face it, nothing feels as great as being in control of your expenses.
Here are some simple budgeting methods to help you get on top of your savings.
The Kakeibo Rule
Kakeibo is an age-old Japanese way of saving money, with Kakeibo literally translating to “household account book”. You’ll have to have a small notebook on you at all times to keep track of your monthly income and expenses but it also comes with a few questions. You’ll have to answer truthfully how much income you receive at the start of the month, how much you’d like to save, how much you actually spend and how you can make things better.
The 30-Day Rule
If you’re trying to conquer your impulse spending (join the club)—look no further than the “30-Day Rule”. This rule basically tells you to put the money you were going to spend on an impulse buy, into a savings account instead. You can either let the money sit here and build up a side of savings or, come back to the item after 30 days and purchase it if you’re still keen on it.
The 50/20/30 Budget Rule
If budgeting in general, has never been your friend comrade, this is okay—we can work with this. The 50/20/30 rule is a really easy rule to throw down in practice and is thought of as one of the easiest methods to implement when you’re really trying to manage your funds for the first time. The rule basically applies to how you divide your income (after tax)—into needs, savings and wants. It basically stipulates that 50 per cent of your income be directed towards your needs which are your absolute living essentials like food, rent, utilities and transport. Then, 20 per cent of your income, should go into your ongoing savings, like an emergency fund, vacation fund, big shopping sprees—you name it. Finally, 30 per cent of your income goes towards your wants, which may look like flexible, every day spending like on coffee or even lunch at work.
The 24-Hour Rule
The 24-hour money-saving rule applies to “big” purchases (you’ll have to be the judge of what these look like for you financially). This budgeting method basically puts off making any big purchases by giving you a waiting period of a day, so you can think over whether it’s worth your money. You’ll just want to make sure you give yourself a value to stick to over a certain period of time.
All Cash Diet
It may seem like an obvious one but dedicating your every-day spending to an “all cash diet” can be seriously beneficial for your savings account. Leave your credit or debit card at home on most days or try your hand at the envelope approach, where you withdraw just enough cash at the start of every month for your monthly expenses like petrol, groceries or general spending. Give it a go, we dare you.
While you're at it, check out all the easiest tax services to get around this EOFY too.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.
Image credit: Victor Juric