25 NOVEMBER 2020
Who should be creating a budget?
Everyone can benefit from putting a budget together, whether you are spending the cash you earn or putting it away into a savings account. It is about what makes you feel financially stable and secure.
If you're spending less than you earn each week, using a budget to determine how much extra you can save each month will get it on paper and give you savings goals to work towards.
If you are spending more than you earn each week, a budget will help you consider where your spending money is going and if there are ways you could save money.
What are your necessities?
For most of us, payday can often be a relief after a period of stress. This is especially true if you’re only getting paid monthly, or worse, not on any set schedule. Luckily, there are things that you can do to decrease uncertainty heading into your payday, such as creating a budget for necessities so that you don’t get caught out at the end of the month. You can then identify any extra money and start a savings account.
Though the definition of ‘necessities’ might be different for everyone, some essentials will always be a part of your budget, such as:
- Housing – whether renting or mortgage payments
- Power, internet, and other utility bills
- Transportation costs – petrol or public transport
After you’ve covered your necessities for the month, you’ll then need to be looking at things like debt repayments if you have them – which are of course crucial – and optional extras such as your cell phone plan or monthly subscriptions for streaming sites – it’s important to remember that these are never as important as paying for your housing and food.
Covering your essentials
After payday arrives, you can start planning your budget for the month. Once you have identified what your necessities are you can start by paying for as many of them as possible, to avoid the stress of a surprise bill at some point toward the end of the month. This might be rent, power, or a monthly shop for non-perishable food.
Afterwards, work out what you spend on food and transport so that you can set a weekly budget aside for those essentials until you’re next paid. This will ensure that you don’t find yourself broke with days or weeks until your next payday.
If you find you are struggling with existing necessities, you might need to think about making sensible choices to cut costs that won't affect your essentials. For example, taking a look at what food and brands you are buying. Could you go for a cheaper alternative? Or saving power by turning the power-points off when not in use. Every small change will add up!
Buck's Tip: Shopping seasonally can help reduce your supermarket spend! Buying fruit and vegetables that are in season will reduce what you are spending on fresh produce each week.
Prioritising other bills
Once you’ve covered your essentials, budgeting out the rest of your pay will involve splitting it between any other debt repayments, savings, and personal expenses.
These additional expenses should be considered in the following order; debt repayments which are of course the most pressing issue. Next, it is beneficial to start a savings plan by putting a portion of your remaining pay into an account that you don't draw from. This can act as an emergency fund to prevent you getting stuck if an unexpected bill arises.
You can set a minimum savings amount each week based on the time frame you want to achieve your savings goal by. Sticking to that amount each week as a minimum means you can top it up to reach your goal faster too.
After that, the rest of your pay is yours to spend however you like!
- Left over bucks can be put straight into savings if you don't need to spend it that week
- Treat yourself, but try not to impulse buy. Allowing yourself to buy something you enjoy each week so that saving money doesn't seem like a pointless chore!
- If you get a pay rise, continue living off your current budget and put that new extra amount straight into savings.
- Check out the budgeting apps you can download to your smartphone. That way it is always there for you to check in on.
Dealing with an unexpected bill
Saving is easier for some than others. If you find yourself struggling to set a small amount aside each pay to prepare for unexpected bill, it might be time to adjust your habits.
A good idea is to ask yourself some questions to help determine whether your money is being managed the best way possible. Do you mostly cook meals at home, or eat out? Do you use your gym membership or could you exercise in the sun instead? Are your next purchases NEEDS, or WANTS?
Superloans can offer you some help in between pays. We offer quick cash loans, with an initial borrowing limit of up to $500. Your first loan is free with Superloans, so it is a win win for you! Your bill gets paid on time, and you pay back the loan from us with no fees or interest.
If you’re taking out personal loans with Superloans, you’ll have the opportunity to start building up your Super Score – making your repayments on time will give you points that indicate good credit, even though your official credit rating might not be in great condition! Best of all, Superloans will give you positive credit reporting if you pay back your loan on time, so that can increase too! Speak to our team today to learn more about Superloans and improving your credit rating!