Best Budgeting Apps Of 2023 – Forbes Advisor Australia

Creating and managing a successful monthly budget is all about knowing how much money you’re bringing in and how you’re actually spending it. Your income should be greater than your expenses, and you should have enough wiggle room to set aside money for savings and retirement each month.

If your balance isn’t where you want it to be, it’s time to create a budget plan.

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How to create a budget

To start with a budget plan, list your income and expenses. Connecting your bank accounts to your favorite budgeting app is the easiest way to do this, but you can also do it manually using a pen-and-paper or spreadsheet program.

Next, separate your fixed expenses from your variable expenses. Fixed expenses are those that do not change from month to month, such as B. Housing, utilities, insurance, childcare, and loan payments, including car, student loan, or credit card payments. Variable expenses include groceries, entertainment, dining out, vacations, and streaming services. Finally, consider including monthly contributions to savings goals like retirement or an emergency fund.

If your expenses exceed your income, look at your variable expenses first to see where you can budget cuts. Then you can think about how you can reduce the fixed costs, e.g. B. move to a cheaper neighborhood with lower rent or refinance your debt.

How to budget groceries

Budgeting for groceries can be tricky—everyone needs to eat. If you’re not sure how much to budget for groceries, compare your spending to research from the University of Newcastle, which analyzed household food spending from singles to families of five. Remember that special dietary restrictions can skyrocket your grocery bills.

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If you’re looking to reduce your grocery bill, meal planning can help. Create a weekly schedule to create recipes that share ingredients or use pantry staples. Meat is a significant expense, so introducing a “meatless Monday meal” can also help reduce grocery costs. Buying bulk packs instead of disposable ones can also save you some money.

How to budget for a vacation

A vacation can be an exciting savings goal if you have some wiggle room in your budget. The first step in budgeting for a vacation is deciding how much you want to spend and when you want to travel. If you’re planning a $5,000 beach vacation a year from now, you can break that down into a monthly savings goal of about $420.

Not sure if you want to embark on an expensive trip? Consider cheaper options like a road trip or look for a good deal. Budgeting for a vacation means you’ll have the funds ready when airfares drop or that up-and-coming ski lodge becomes bookable.

How to plan the rent

To determine how much you should spend on rent, many Australians use the 30% method. This budgeting principle states that you shouldn’t spend more than 30% of your income on rent or your mortgage (which should include household utility bills if possible). If you apply this rule and make $1000 a week, you don’t want to spend more than $300 on your weekly household expenses.

Sharing an apartment or house can help reduce your housing budget, as can moving to a more affordable area. If cheaper accommodation isn’t an option, you may need to consider other areas of your budget to reduce costs.

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