Money

How Much Do You Really Know About Budgeting?

Spend less than you earn. That’s budgeting 101. And it sounds so easy, so you think you’ve got it all figured out – but does your bank balance really back that up?

Sorry, low blow. But we all need to brush up on our budgeting skills from time to time. Here are a couple of quick tips.

In the black = good, in the red = bad

Basically, you don’t want to spend more money than you make. If you’re always scrounging for coins in the week before payday, then try tracking your spending to see where you could rein it in.

Put your money aside the day you get paid

Wondering why the figure in your savings account never moves up? If you’re putting money in at the end of your pay period – the money you’ve got ‘left over’ after buying anything and everything your heart desires – then that needs to stop, like, yesterday. Figure out how much money you can put aside each pay period, and set up an automatic transfer. Out of sight, out of mind – and, cha-ching!, growing every month.

Get an emergency fund

Look, life happens. Cars break down, decent people get made redundant, healthy people have to spend stints in hospital. And all of these things cost money. For piece of mind, put some savings towards an emergency fund. Common financial wisdom suggests three months’ living expenses is a good number to aim for.

Your budget should cover all of your essentials – and some treats, too

Beer might be a discretionary expense (see also: a new watch, tickets to that festival, fancy cheese…) but budgeting is all about covering your non-negotiable expenses, so you have room for fun things too. By knowing how much you need to set aside for rent, car rego, and power bills, you can spend wisely on your avocado toast. 

Set up a savings goal – or two, or three

It’s hard to find the motivation to sock away your hard earned money when you’re not sure why you’re doing it. But a goal is inspiring, and a solid reminder of what you’re working towards. A Westpac Life account allows you to set aside money for different goals within the one single account. None of the hassle of multiple bank accounts, and all of the benefits (not to mention you can earn up to 2.30% p.a. variable interest rate). So you can save for short term goals – like that holiday with your mates – and put aside money for long term goals like a house deposit, too.

Open a Westpac Life account today in less than three minutes.

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