If you want to take greater control of your money, you need to start with a budget. There is some real benefit to understanding where your money is going. Find out where it goes and you’ll uncover your spending habits. Uncover your spending habits and you’ll be able to work out why you do what you do. Work this out and you can then break those old habits and unleash the saver in you. Do this and you’ll have the perfect budget!
If all this talk about doing a budget has you hyperventilating, then don’t fret because there are ways to set a budget without having to over-scrutinise every cent you spend.
1. Start with a formula
There’s no shortage of budget formulas to help you reach your goals, including paying your bills on time and being able to take those much-needed holidays. A popular option is the 70:20:10 plan. Here’s how it works.
Divide your money between: 70% for everyday living costs (rent or home loan, transport, clothing, food and utilities). 20% for saving 10% for splurging
The formula that works for you can vary but the non-negotiable part is always to allocate a percentage of your take-home pay to savings.
Next, set up some buckets. Instead of lumping your “everyday living” expenses into a single bucket, for instance, open multiple buckets (accounts) and give each of them a nickname. You might have one account for school fees, another for household bills and so on.
The same goes for savings. The
