THIS SITE IS INTENDED FOR ADVISER USE ONLY

By clicking through to the Investments or Platforms site below you confirm that you are a licensed adviser operating under an Australian Financial Services License.

Budgeting tips and saving 101

No matter how much you earn, taking control of your money will limit potential financial stress and help you feel more secure about the financial decisions you make every day.

Follow these simple budgeting tips to reach your savings goals sooner – and find more money for the things that really matter.

Step 1. Set some goals

Step 2. What’s coming in?

Step 3. Track your spending

Step 4. Find some quick wins to cut your costs

Step 5. Invest your ‘disappearing’ dollars

Step 6. Turbo charge your savings

Step 7. Review monthly


Step 1. Set some goals

Sticking to a budget may mean changing some habits, so it’s important to know why you’re doing it. Whether you’re saving for a holiday, or you want to have a comfortable emergency fund or more money to top up your super, set a measurable (and realistic) amount first so you know what you’re aiming for.


Step 2. What’s coming in?

Make a note of all your sources of income as a total monthly amount. As well as your salary, that includes any Centrelink payments, interest on your savings or investments, and any regular income from investment properties. It doesn’t include bonuses or commissions you may or may not get.


Step 3. Track your spending

Now it’s time to work out where it all goes. Gather all your bank and credit card statements, utility bills and insurance policies, and make a list. Fixed monthly expenses include your mortgage or rent, car loan, utilities and phone bills, and insurance. Variable expenses may include things like groceries, petrol, eating out and entertainment.


Colonial First State’s budget tool can help you tally it all up. And if there seems to be a gap you can’t account for, try using an app to track all those incidental or cash purchases on the go – or make notes in a small diary you can carry with you.


Step 4. Find some quick wins to cut your costs

Once you see where your money is really going, you’ll be able to identify some simple ways to add more to your bank balance. Remember, every dollar can make a difference towards your goals.


This includes those fixed expenses. For example:

  • Is it time to revisit your health insurance extras policy?
  • Could you save by comparing gas and electricity providers? They will often provide greater discounts for on time payments.
  • Take a look at your insurance policies, especially those that automatically renew – could you get a multi-policy discount? ASIC’s Money Smart website suggests getting three quotes, but make sure you’re comparing like for like.
  • Could you save on interest by prioritising paying off your most expensive credit card or consolidating debt? Are you paying for overseas transaction costs on online purchases?


There are also ways to trim your variable expenses. Pre-planning meals, choosing seasonal fruit and vegetables and comparing prices can make a difference at the supermarket checkout. Then there’s those regular barista coffees and store-bought lunches…


Step 5. Invest your ‘disappearing’ dollars

Once you’ve found (or created) a positive gap between your income and expenses – the money that unaccountably ‘disappears’ every month – you can use this cash as the basis for your investment strategy. Whether that means putting aside a set amount into an online savings account or as extra super contributions, or setting up a long term investment plan, all depends on the goals you set up in step 1.


Step 6. Turbo charge your savings

There are a few easy things you can do to make your savings work even harder for you, including:

  • Understand the power of compound interest – the interest you earn on your interest can make a major difference to the value of your savings over time.
  • Pay off any lifestyle debt first – credit cards or personal loans – as the interest you pay on these is likely to be much more than any interest you make on your savings. And it compounds as well!
  • Check the small print on your high interest savings account – make sure any introductory interest rates or payment requirements work for you.


Step 7. Review monthly

Once you’ve established your budget, it’s a good idea to review it monthly to stay on track.

 

Remember, sticking to a budget doesn’t mean you never eat dinner out again. It’s about getting a better understanding of where your hard-earned dollars are being spent, and ultimately redirecting them to spend on the things you really want.


To get started – and get your expense back in control – check out Colonial First State’s budget tool.

Disclaimer
Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (Colonial First State) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. Colonial First State also issues interests in products made available under FirstChoice Investments and FirstChoice Wholesale Investments. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The PDS and FSG can be obtained from colonialfirststate.com.au or by calling us on 13 13 36.