Step one: Getting started - where am I today?
"People say budgeting is hard, but it's not. I kicked off my
budget by recording every cent I spent in a notebook - I had to
know where all my money was going. It sounds impossible but it's
not - you should have seen the look on the check-out girl's
face!" Marina, Account Executive
Most of us aren't really sure where our money goes. In fact, most
New Zealanders couldn't survive more than a month without
income.
The solution is simple: create a budget and find out why those
dollars and cents are disappearing. Your budget should work as both
a saving and spending plan.
Where is the money going?
Like Marina, write down all your expenses: everything
from your one-stage bus tickets, the chocolate bars from the
supermarket, petrol, daily coffees, rent and bills.
Alternatively you can keep track of your expenses by using your
credit card and EFTPOS statements, and receipts. If you withdraw
cash, write down what you spend it on.
If you're computer-savvy, you can download all your transactions
from online banking.
It's important to be thorough even if it hurts. Don't round up or
down - record exact amounts. After all, it's these small amounts
that Westpac refers to as the leak factor - those insignificant
expenses which, if eliminated or reduced, could help you save for a
great rainy day fund, like car expenses or a visit to the
dentist.
I want it, but do I need it?
First of all you need to address 'wants' versus 'needs'. By
establishing what is necessary (ie food, transport, bills) versus
what you want (ie clothes, gadgets, entertainment, takeaways)
you'll be able to reduce your spending on items that aren't
crucial.
You might even be able to reduce your essential spending, e.g. not
all things you buy at the supermarket are essential.
Click here
for our hot tips
on saving money
Tally it up
Now you've collated your expenses, let
Westpac's online budget
calculator
do the work for you!
Simply fill in your income and expenses (from groceries to car
registrations and insurance) and the calculator will work out where
you are today with your money.
Budget calculator quick tips
Remember to adjust the drop down tab to specify whether
the costs are occurring weekly fortnightly, monthly or
annually.
Set your budget to match your pay period e.g. do a fortnightly
budget if you get paid fortnightly.
Westpac's online budgeting tutorial
Click here
to
take the tutorial now!
Watch the video
Click here
to watch Nicci,
Marina and Rae discuss their budgeting tips.
Talking Money Sense budgeting links:
Getting Started - tips to get your budget off
to a good start
Step two: Looking ahead - where do I want to
be?
Step three: How can I make sure I stick to my
budget?
The content of Talking Money Sense is general in
nature, is designed for information purposes only and is not
intended to constitute financial or other advice. Information is
subject to change. Westpac New Zealand Ltd.
