7 Personal Budgeting Tips for a Fresh Start to the 2014/15 Financial Year

Don’t Let Your Money Go Down the Drain!

As tax time is approaching, many of us are in a frantic panic. Some are drowning in paper work and yearly figures and others are excited about receiving a decent tax return. Regardless though, tax time tends to remind us all about the state our finances are really in.

Hopefully the damage isn’t too bad. No one wants to waste money, but the whole ‘saving’ side of things can be hard work. Every year we promise ourselves we will be better, and maybe this financial year you have been! Unfortunately though, even the most vigilant budgeters break from time to time and so it’s important for all of us to have a plan of attack.

It’s not too late to get your finances in order, even if you are stressing coming into tax time. We check out the best ways to get financially fit for financial year 2014-15 and beyond.

1. Keep Your Credit Card under Control

Credit cards are an easy trap to fall into. Whilst they can be a huge life saver, it’s an absolute must to keep it under control – especially if you have more than one. If discipline isn’t your thing, then having a credit can be a terrible idea. The intended use for a credit card, or multiple cards, is for them to assist your financial position and money management – not to be detrimental to it. If you’re using your credit card for the wrong reasons, it may be time to get rid of it or put a better plan into action.

Credit cards are attractive for anyone with a busy lifestyle because it provides a cash flow freedom. Bear in mind though, every purchase you make on it puts you in debt and the cost of the item you paid for just went up. If you’re going to use it, best practice is to ensure you stay within your limit, pay it in full every cycle to avoid additional charges and never withdraw cash advances from it.

2. Make a Budget and a Shopping List

It’s a fairly obvious thing to suggest when looking at your finances – make a budget, but yet so many still fail in this department. It’s important for a budget to work properly that it’s realistic and reviewed accordingly. If you create a budget that’s impossible to stick to, then it’s never going to get you anywhere.

A good budget shouldn’t be a restriction on your spending, just a plan that can help you visualise where your money is going. It will help you to make informed choices and give a better understanding on how you’re spending your money – exactly! Your budget should be in line with your goals so be sure you have some strategies in place that help you get there.

In line with a budget also comes a written shopping list. Sticking to a list of things your pantry and fridge are short on ensures you don’t buy on impulse and forget necessary items. This handy trick results in some significant savings. 

3. Go Coupon Crazy

Looking out for coupons and specials is a great way to save money and get your budgeting in order for the year. Check out the newspaper and store circulars that come in the mail. Shopping online tends to offer great discounts too, whether it’s for gift ideas, yourself or the grocery shopping you can find yourself saving tons.  Sign up to deal websites like Groupon or Living Social for reduced prices on dining out or getaways (but ensure that it's within the budget you created!)

Make sure you’re always comparing prices too. Whilst it can be the easy option to just buy what you see first, shopping around will allow you to get the best deal and take some pressure off your spending. 

4. Build Protection

Life is full of emergencies and uncertainties you just didn’t plan for, thus your financial situation may have taken a bit of a beating.  The money you earn and everything it finances needs a level of protection. Identify what insurance considerations you should make for you and your family so the important things are secure.

Don’t make the mistake of combining insurance with investment and make sure you consider things like health, home, income protection and disability.

5. Identify Your Requirements

It’s absolutely crucial to be realistic and aware with your future requirements. Vague goals or forgetting your financial situation will keep changing can put you in a bad financial situation. Keep in mind your requirements will constantly be changing too, and this is why you should adapt your budget plan accordingly.

Consider your requirements for now, in the next few years and when your retirement. Perhaps expecting a foreign trip every year after retirement isn’t going to work, but that’s not to say you can’t reach goals. Staying realistic about your requirements will help with strategies to accomplish what you want in your life.

6. Be Financially Literate  

Whilst you don’t have to be a trained accountant or investment advisor to manage your finances, it’ll definitely make a difference if you understand some of the basics. With every financial decision you make, there’s a risk involved so make yourself financially literate and research well.

There is no shortage of advice these days, and experts and the internet is armed with a wealth of information so never be afraid to ask the right questions and do your homework first.  

7. Review the Year 2013-2014

Constant reviews are essential for a good budgeting plan that adapts with you. As your situation changes, you find what does and doesn’t work for you – document this. What things did you miss out? What mistakes did you make? Consider the investments that were on track for the year, any pending tasks needed to reach your goals and review what you can improve on next time.