Many people associate a budget with scarcity, and that’s where they come unstuck. Once you understand that personal budgeting is all about abundance – and having an allowance for everything – that’s when it becomes fun. And, when it becomes fun, it becomes sustainable!
An effective budget includes financial goals and aligns spending to those goals. For most individuals, general living expenses are the largest part of their budget and smaller amounts are set aside for long-term goals such as buying a home, starting a family, travelling or starting a business. Without a budget, it can be difficult to save for these goals, as many people find they have little-to-nothing left to save at the end of their pay cycle. These mindsets and habits can be detrimental to your savings – the “I’ll save for it next month” attitude can take over and unfortunately this generally leads to minimal savings.
Personal budgeting, really, is not about limiting spending, it’s about structuring it. Putting money aside for living expenses, special occasions and items and ultimately, saving for that special holiday, that dream family home or start-up business. Whatever you’re saving for, once you realise that your mindset is the most important factor within your budget, you will start to realise that budgeting is not about going without, counting pennies or living poorly – rather budgeting is about making sure you have put away money for everything you need, so you can work towards your goals.
Effective personal budgeting limits unnecessary spending, but that doesn’t mean it limits fun! Birthdays, Christmas and special occasions are just as fun with a budget, if not more exciting because, when sticking to a budget you don’t have that “budget blowout guilt” that so many of us feel once we overspend. In your budget, cater for the occasional treat, such as eating out or going to the cinemas, put money aside to allow for birthdays, special occasions and treats – just do so within your means. And once you’ve started doing so, budgeting becomes fun, like a little game! Where can you save money? Where should those savings go? What should you allow for this month? Personal budgeting becomes sustainable when you realise it’s not about two minute noodles and going without. Change your mindset, change your life.
Want to know more about Sort My Money’s personal budgeting service? We charge the lowest fees of any personal budgeting company in Australia, we have no lock in contracts and provide an award-winning service that helps our clients achieve their financial goals. Take the hassle out of personal budgeting by letting the experts do it for you. Contact us to inquire about a consultation.