Budget planning is all about numbers. The firmer grasp you have over your incomes, expenses and savings, the better you would get at budget planning and long term financial planning. To get started with budget planning, you need to know five numbers.

• The first number is the amount of money you are earning. Depending on how many earning members you have in your family and how any of you are contributing towards the same financial goals, there may be one or more incomes. Also, you must factor in the returns on any investment that you have. From interests accrued on savings to dividends on shares, every incoming fund including but not limited to your salary goes into this first number. For effective budget planning, every earning member in a family must be a part of the exercise. Else, it is futile.
• The second number pertains to the expenses. The timeline for expenses must correspond that of the income. If you are earning fortnightly or calculating quarterly incomes, then your expenses must also be for a fortnight or three months and likewise. To calculate the expenses, factor in all your financial obligations and expenditure that you have to attend to. From mortgage payments to credit card bills, utilities to groceries, shopping to discretionary expenses, everything must be calculated to get to that number.
• Once you have your total income and total expenses, you must arrive at a number that you wish to save. Make sure you have a timeline. Deciding to save ten thousand is futile if you don’t have a deadline. This number, the number of savings you need in a certain period of time, has nothing to do with the dreams you may harbor. Forget the reasons why you are saving. Just focus on the number. Now, figure out how much you have saved already and how much you need. Do the math and arrive at a monthly figure or quarterly if you like. Going for the least denominator is always better. Putting aside a hundred bucks a week is easier than extracting a thousand bucks all of a sudden from one pay cheque.
• You would have a long term goal and very short term goals. Between the two have a midterm review policy. Every three months or six months you must check on your savings and record your progress. This interim number is very important as it will determine if you have the right heading.
• Finally, you must have a threshold for specific periods of time that you must cross. For instance, twenty thousand in five years can be broken down to five thousand in the first two years, fifteen thousand by the fourth year and the remaining five thousand in the final year. The more you save now, the better it is. You cannot predict untoward developments in your life.

There is no start date or end date for saving. One should start saving money at a very young age, preferably in the teens so that it can really develop into an old habit, hard enough to shun. Those who do not get enough allowance or don’t have part-time jobs as a student can start saving right from the first pay cheque. The longer you delay the onset of saving, the longer it would take for you to amass the necessary assets. Aussies need to become money saving smart, especially at a time when cost of living will only grow dearer, healthcare costs will skyrocket further and our demanding lifestyles will stress our financial prowess.

The Motivation

Saving requires motivation. Very few people are habitual misers in the twenty-first century. With so much around begging for attention and our hard earned cash, one cannot distract oneself enough. Staying secluded or distanced from the provocations and the enticements is very difficult. The only thing that can compel you to save is a healthy motivation. Saving for a home, car, emergency funds, higher education, marriage, kids’ education, vacation, business or even early retirement can be strong motivating factors.

It is necessary that you work on short term and long term goals. Short term goals will motivate you every day. Long term goals will motivate you once a month or remind you every year to have a savings target for the fiscal.

Be Pragmatic

You know how much you earn. Decide how much you wish to save. Then decide how much you can spend. Don’t have an approach where spending comes first and then whatever you can save. Have it backwards. Set a budget and then spend accordingly. The budget must include everything from rent or mortgage to groceries, entertainment to dining out, shopping to the odd weekends away.

Comply with your Nature

You wouldn’t be able to do anything that is absolutely against your natural self. If you are someone who enjoys partying, you cannot shut yourself at home or deny yourself even an iota of socializing. You must have an approach to savings that complies with your lifestyle, your needs or desires and who you are essentially. Work on a budget within that realm of possibility.

Multipronged Approach

Have a multipronged approach. Keep aside a bit of your monthly income every time you get your pay cheque. Make abrupt decisions of putting aside a larger sum of money whenever you get the chance. There will always be months when you would spend less and that is the time when you boost your savings. Don’t go out to spend the spare cash you have when the month has been kinder on your finances. There will soon be a month turning against you.

If there is one thing that you are always running low on, it is probably money. Between bills and unexpected expenses, it can be really difficult to add to your savings. This means that you need to look for new ways to save. No matter how much money you are saving, it can make a real difference. Even small amounts can add up over time and every little bit helps. It is time that you learned about some of the best ways that you can begin saving right now.

Here are some of the best saving tips that will work for you:

Refinance

It might be time to consider refinancing your home. If you are one of the many people that have both a savings account and a mortgage that you are paying off, you can combine the two in order to get access to the biggest savings. This means that you have the ability to refinance your home and get access to a lower interest rate. The interest rate on your mortgage is important to have as low as possible because the amount that you pay on interest adds up over time due to the long life of a mortgage. An offset account is great because the savings will help pay off the interest, but it is money that is still accessible to you. This gives you the best of both worlds and the biggest savings possible.

No Fees

Check out if you need to be paying any annual fees of any type. This means that if you happen to have a credit card that comes attached with an annual fee, you should call the credit card company to see if you can have the fee removed. If they are unwilling to do so, you are best off cancelling the card.

Stop Daily Splurges

You might think that a $5 coffee each morning or a $10 lunch out each day is a small expenditure, but they add up over time and are actually a major expense. This means that you should try brewing your own coffee from home or packing your lunch for work in order to save now.

These are just a few of the ways that you can start saving today. Sometimes, however, a loan is necessary and we recommend speaking to your YFG lending specialist in order to get expert and professional assistance in securing a loan today.