Budgeting to make your money work for you and your lifestyle is an important step to achieving your life goals.
But how do you know if your budget is working? How do you know if you’re on track towards success?
This is where reviewing your budget is key.
Monitor your budget
Regularly checking in on your budget is important because you are constantly evolving and so are your goals, so you need your budget to reflect that. Creating a budget is great, but it’s not set and forget or a once-off endeavour.
Creating a schedule to check what you spent the month prior will enable you to create an accurate budget for the coming month. This process allows you to make adjustments for your needs. This could include paying off a debt or saving for a holiday. Using the previous month’s spending statistics shows you what actions you need to take this month to stay on track.
If something in your budget is not on target for your goals, it’s imperative to correct this issue as soon as possible. This, after all, is the point of a budget. If you take this step you’ll identify and solve spending problems early, so the damage won’t be too extensive.
Rushing to make rash, knee-jerk decisions can create even bigger issues, so instead take the emotion out of it, review your budget closely, examine the data and make balanced, logical decisions.
We’d recommend going through this process as often as you need to, so you create those positive, proactive habits.
Utilising programs with spreadsheets is a fantastic way to itemise and lay out the spending that happens on a monthly basis, and also monitor trends. This helps you see the immediate budget impact but also understand where you’re heading.
There are many great budgeting apps and programs, so it’s just a matter of finding one that suits you and your ideal visual layout to keep you engaged and using it correctly. Ask your experienced accountant for their recommendations.
Show discipline and respect your budget
Once your method of budgeting is set up, you’ve now got to use it. While your budget system may be great, you’ll still need that will power to say no to those out of budget items, and say yes to your plan.
It can be easy to let your good work slip. Perhaps the hardest thing isn’t budgeting initially, rather having discipline to stay within that budget to reach your goals, no matter how far away or impossible they may seem. Working with an experienced accountant can be a great way to be held accountable for spending and making rational decisions on where your money should go.
When it comes to budgeting, there’s no silver bullet. You need a plan designed for you and your needs.
Get professional budgeting advice from accounting and financial planning experts, Nitschke Nancarrow, who can set you up with a plan to put you on the path to wealth.
The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.Tags: Budget, Budgeting