W0w, 2020 is a really different year. We’ve had fires, floods and now a pandemic. This is no time to be complacent about your spending and tracking income. Spending time budgeting can really pay off now, and in the future. There are a lot of people want to spend less time budgeting. Learning how to budget correctly is the key to refining your budgeting skills and spending less time in the long run.
According to the Commonwealth Bank, the average person spends a little over two hours a month handling their budget and the growing number of useful smart phone applications are cutting down the time needed to handle this tedious chore.
Planning a budget does not have to be such a bore though, in fact it can be a great way to get excited about the future and look forward to the bright future ahead. The best way to approach the daunting task of budgeting is to prepare early so you have it out of the way and you can sit back and relax knowing your future finances are on the right path.
These days you can find apps for pretty much everything, and budgeting apps are no exception. We have compiled a list of budgeting tools to help you, in another post, definitely worth checking those out.
When creating a budget, there are a few things to keep in mind. You need to set goals, look at your mortgage and investments, credit cards, and savings goals.
Setting Budget Goals
Setting a goal can be a great way to get started. Goals based on what you would like to achieve in the near and long term will help you focus on the tasks at hand. A monthly and yearly budget is essential groundwork so make sure to calculate your fixed cost and income to give you an idea of what you are working with.
A mortgage is an inexpensive form of debt and is a great way of investing into a capital asset but a small change in the interest rate can be a large difference in your monthly payment so make sure to consider the chance of rising rates in the future.
Credit card debt on the other hand is an expensive form of debt and if you have multiple cards then you should do your best to consolidate and pay off the credit cards before the payments eat away at your budget.
Plan To Save
Savings are an important part of budgeting. Saving for a holiday retreat or a new car are exciting things to think about but the most important thing to save for is yourself and your retirement. Let your money work for you by investing regularly into a savings account with a high interest rate.
Super Is Important
Do not forget to spend some time sorting out your Super. A financial advisor can always help you figure out the details and set you on the right path so you can sleep easy at night. Investing into the equity market is an excellent way to grow you wealth. Think about what type of super payments now will make life in the future liveable for you.
Look After Yourself During This Uncertain Time
Make this the year where really understand your financial situation, and please, make the most of what the Government is offering for those people affected by COVID-19 and the financial ramifications. Now is the time to be financially responsible and take care of yourself and your family.
The JobKeeper Payment is designed to help businesses to keep people employed, even if their hours have been reduced. Eligible businesses get $1,500 a fortnight for 6 months to keep paying eligible employees and is also available the self-employed.
Income support payments
The Government is also offering support payments for people affected by COVID-19 of a fortnightly $550 coronavirus supplement from 27 April 2020 (for those on support payments already).
Household support payments
Those living in Australia getting support payments are also going to receive 2 x single payments of $750 on 12 March and on 13 July 2020.
Early access to super
From 20 April, some people can apply to access up to $10,000 of super in 2019-20 and another $10,000 in 2020-21. But remember, this is your retirement savings and should only be touched if you have no other options available. Only eligible people can apply to do access their super early. See early access to your super on the Australian Taxation Office (ATO) website for more information.
If you possibly can, try to save a little, just in case. Protecting your finances with insurance coverage is crucial and should not be overlooked.
Budgeting can seem like a big chore but it is one of the most important things you can do for this challenging time, as well as beyond this pandemic. Make 2020 the year to learn how to budget correctly!