Four ways to improve how you budget and save

Budgeting guidelines

  1. Be realistic—Living to a budget is not a ‘crash diet,’ it’s a healthy balance where you shouldn’t deprive yourself or over-indulge in spending.
  2. Spend less than you earn—Live within your means and put any spare money into your savings.
  3. Avoid personal debt—Don’t spend what you haven’t got so cut out or cut back on your credit card spending. This doesn’t mean avoiding ‘good debt’ to buy assets like a home or investments.
  4. Don’t be caught out—Have an emergency fund for unforeseen events and cover yourself with the right insurance.

Savings guidelines

  1. Pay yourself first—Deposit a set dollar amount regularly into your savings much like you would pay any other bill.
  2. Separate your savings from expenses—Do automatic transfers into a savings account to keep your money out of reach of your everyday account.
  3. Consolidate all your income—Deposit extra income like tax returns, bonuses, gifts, even sales of personal goods into your savings.
  4. Record and review your habits—Use shopping lists, online diaries or a budgeting app to log what you spend.
  5. Define short- and long-term goals—Be specific about your saving goals and timeframe. Short term (one or two years) could be a holiday, car or appliances. Long term (five plus years) could be for a home, investments or your retirement.


Source: AMP, originally published on  amp.com.au/personal/banking/education/budgeting-saving

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