The Importance of Creating a Family Budget
Do you know where your money is going? What about getting on top of that credit card debt? How can you save up for your next big trip overseas? To answer these questions, and more, it’s good to work on creating a family budget.
In this interview, our finance expert, Alison Greenwood, explains why a budget is so important.
Pointers from this episode about the importance of a budget to save for a house
- It’s good to set rules around your credit card use.
- To save for a housing deposit, it’s great to get a budget going as per the chat with Alison in Part One
- First home buyers are now able to put salary into their superannuation and not pay full tax on their money – up to $30,000 each. This scheme allows you to save up for your deposit. You need to elect to start this with your super fund. Read about the First Home Super Saver Scheme >>>
- There’s also the first home owners grant for eligible buyers. Read about the First Home Owners Grant >>>
Please note that this financial advice is given for listeners in Australia, for the 2018-19 financial year. However, many of the principles are true, no matter where or when you are listening.
- A budget is helpful because it sheds a spotlight on what we spend our money on.
- But budgets can also be very painful!
- They are are a foundation for discussion and discipline when creating wealth.
- To keep track of funds, do as much of your banking online as you can because you’ve got records.
- Firstly look at all the income you are bringing in.
- The look at debts, especially those with direct debit.
- Then add up your other regular expenses such as food, phone and internet usage, power bills and so on.
- Then any other items you spend money on such as clothing, gifts and entertainment.
- Break all these down into fortnightly income and expenses.
- Then you can see what money you have left over, to work on what you can save up for such as house deposit.
- If you don’t have enough money for savings, then there are some strategies you can put in place:
- Consolidate debts into one loan
- Review all the money being spent – are you spending unnecessarily?
- Be disciplined when using credit cards, and pay off monthly. You can also reduce your credit card limit.
Here’s a useful tool for you: How to do a budget >>>