A recent survey revealed that just one in two Kiwis have prepared a budget in the last year. And, the same survey suggested that more than 30% of all New Zealanders have NEVER prepared a personal budget!
Budgets can feel a bit like being on a diet. You feel like everything fun is off the menu, and it's easy to get disheartened if you go over your spending limit. However, not having a budget might mean you lose sight of how you're spending your money - and you could be spending more than you earn. You might end up in a financial spiral - living payweek to payweek with no idea how to cover that upcoming bill, let alone start saving to get ahead.
Creating a workable budget is the first step towards financial success. It means that you're in control of your money and able to weather any financial bumps in the road without getting derailed.
Here’s a quick checklist of things you can do to get prepared:
Getting your finances under control requires some up-front work. However, gaining clarity on your expenses and spending will help you identify areas where you can make changes.
There's loads of budgeting apps and tools that can help you get started with a budget. Not sure where to begin? Check out mybudgetpal - it's a customised budget tool to help take the stress out of managing money.
mybudgetpal is a really simple, easy-to-use tool that helps create the foundations of a good budget - giving you back control over your finances. Designed by Booster, mybudgetpal is free to use - no subscription required!
If you were suddenly unable to work, could you cover all your expenses until you got back on your feet? How much do you need as a backstop to see you through a financial bump in the road?
Once you have that figure, work out how much you can put aside each payday to start your emergency fund.
Your KiwiSaver account is not like a bank account. You need to make sure it’s working for you now so that you have the retirement you’ve dreamed of.
New Zealanders have a tendency to be under-insured. Risk insurances, such as life, trauma or income protection can help you and your family stay afloat during an unexpected illness or job loss.
Working through this checklist will help you get on top of your spending and start taking back control of your money. By paying yourself first, you'll get into the savings habit quickly and easily.
Before long, you’ll be well on your way to financial freedom. You'll be better equipped to handle any unexpected financial bumps - and enjoy life, whatever it brings.