How to set yourself a New Year’s budget and stick to it
Wednesday 08 January 2020
At the start of every new year, it seems that everyone has got the same goal in mind: to save more money. But obstacles and temptations abound, and even after a few setbacks it’s easy to become demoralised.
Thankfully there are plenty of things you can do to help cultivate smart money habits, chief among them creating a budget. Whether you’ve tried to budget before and it just didn’t stick or you’re completely new to the concept, we’ve got a few tips to help you get off to the right start.
Keep a separate savings account
If you haven’t opened up a separate savings account already, that should be one of the first things on your to-do list. Not only will it keep you from confusing your savings with your everyday spending money, you’ll also be earning interest on any funds kept there.
Try working out how much money you’ll need for expenses each week or month and setting yourself an allowance. Whenever you’re paid, keep that amount in your transaction account and transfer the rest into your savings account. Or better yet, schedule an automatic transferral to take place each payday.
If you’re finding it difficult to dial back your spending, it might be a good idea to set up a savings account with a different bank. That way, whenever you find yourself tempted to dip into your savings, the extra step involved in moving your money over might force you to reconsider.
Take advantage of savings features on your bank app
Chances are your bank app lets you do much more than pay people and move your money across your accounts. Nowadays, many have built-in features that offer insights into your spending and help take some of the hassle out of saving.
For example, the Commonwealth Bank app comes with an array of nifty features like spend trackers and the ability to set personal goals. Others, like the ING app, allow you to round up your card purchases to the nearest dollar and deposit the difference into your savings account.
If your bank app doesn’t offer any of these, don’t worry. There are plenty of standalone budgeting apps that can do just as good a job, with many allowing you to link your transaction account so you won’t have to manually record the purchases you make.
Recruit friends and family to help
Sometimes it can seem difficult to maintain your budget and your social life at the same time. After all, all the usual tickets to a fun night with friends - restaurants, bars and movies - add up, and if the goal is to spend less, some of those things will have to go.
But budgeting doesn’t have to mean holing yourself up indoors. Let your friends and family know about your money saving goals and suggest the occasional cheap alternative to your usual outings that everyone will enjoy.
Review your budget and revise it if necessary
If this is the first time you’re setting a budget, there’s a possibility you’ll come to feel it’s a bit too restrictive. If it turns out you’ve set too lofty a goal, don’t get discouraged, and definitely don’t abandon your plans altogether. Instead, adjust them so they remain realistic.
This goes doubly so if there have been any major changes in your life that could have an effect on your spending, such as a change in employment status, a longer commute, or a new addition to the family.
For more tips, be sure to check out our guide to creating a budget. And if you’re after a quality savings account to help your stash grow, visit our savings account comparison page, or browse the selection below.