Better budgeting in a time of virtual reality

Coffee shop CBD
Photo by JoJo Yuen

Being at home this much changes how you spend, doesn't it?

I don't know about you but when I'm normally in the CBD, I'll pop out for a $4 coffee in the morning, then maybe another one around lunchtime. Lunch can add up, too, especially in Sydney. How about the post lunch snack? Let's not get into that.

Then of course getting distracted among all those shops in the city can be a problem. Sometimes I swing by Pitt Street Mall and get a new t-shirt, or perhaps hop over to Haigh's and snag some chocolates for the family. Oh wait, there's a sale at Mick Simmons! I'm sure you have similar vices.

The point is, it can be hard to track your spending when you're busy and hopping from one place to the next. So perhaps these odd times have at least one benefit, that you can think a little bit more about your spending and saving. While you're largely stationary, you can consider how your money moves, so to speak.

Write your budget down!

We've written quite a bit about how to budget at Mozo, and even have some handy lists of budgeting apps you can try. If you're the type of person that's diligent with your finances, I think an app makes perfect sense. For me though, I need to force the saving discipline a little, and that means going back to the old pen and paper.

I've also read several articles that say writing things down can help you feel connected to the budgeting process. I'll buy it - that the physical act of picking up a pen slows your financial thinking a touch.

Now a proper budget for your household is a significant undertaking, so if you're keen to do that during these at-home days, it could be time well spent. Jessica Irvine's budget breakdown in The Herald recently was really insightful. But that's a full scale track-it-all exercise that I can't see myself doing.

However, I am interested in knowing where I can make small improvements because like those impulse purchases made in the CBD, I'm starting to see similar habits form when online shopping. Perhaps you can relate. The online mall is amazingly large!

So writing down what you spent over the past week or fortnight, might just be the ticket to help strike a balance. Some experts say that when you’re more conscious of your spending, you actually free up some money in your budget. Great! And in a sense, the budget isn't the whole point here but the awareness of your money is.

Setting goals sets you up

The other part of writing expenditures down and having awareness is having some sense of the goals you want to hit. At Mozo, we have also written a great deal about setting financial goals - do check those tips out. But remember that knowing why you have goals can be just as useful, too.

For example, in the past you might have had a goal to save for a holiday and, of course, that goal seems harder to achieve right now. But it doesn't mean we need to dismiss these sorts of exciting daydreams. A goal can be motivating, not simply practical. The why of the goal can be meaningful.

So once you've set aside some money to pay off your buy now pay later purchases, rent, or to cover the servicing of your car, saving money for the future might be a useful task.

The way I see it, we're always going to make those extra discretionary purchases, whether in person or online. And that's fine. But being at home we might be able to track them better and therefore might be better able to save for something nice. This is the larger goal, as it were.

As an example, I've written down a few discretionary purchases this week: a $4 coffee each day (x5); a $60 hoodie from an online store; a movie on Apple for $7.99; and a book on Kindle for $14.99. That's $103 all up. Not too bad, though I'm pretty sure I can cut back a bit here. Having an awareness of this is a great help and means I might even try to park $50 a week to go toward that sunny holiday ... somewhere on the horizon.

For more tips and calculators to help with your budget, check out our Family Finances Hub. We also have loads of good savings tips and let you compare the top savings products in our Savings Account Hub.