It’s easy to underestimate how much we’re spending – particularly when we’re paying by tap and go. But once you’ve worked out a budget and how you’re going to put away a little bit extra, you need to stick to it in order to make it happen. We’ve got five tips to help you stay on track.
5 Tips To Help You Stick To Your Budget
1. Start small
Similar to dieting, saving isn’t a fad; it’s a lifestyle change so start small. See if you can eat out one time less a week or walk instead of catch the bus. The closer your budget is to reality, the more likely you are to stick to it.
2. Set up a different bank account
Get confused whether you can spend the money in your account or not? The easiest thing to do is to set up a high interest savings account. There are a number of high interest savings accounts that don’t come with debit cards to make it harder for you to get your money (and easier for you to save). Some even offer higher interest rates if you don’t make a withdrawal.
Some suggest splitting your income into three parts: 20:30:50. 20% should go into savings, 30% should be spent on wants (shopping, entertainment and dining out) and 50% should be spent on needs (housing, groceries, debt repayments and health). Set up different accounts for each.
3. Use your autopilot
Direct debits are not just for gym memberships and Netflix. They can also be a really helpful tool in sticking to a budget. If you do set up a high interest savings account, set up a direct debit on pay day to move your savings into it straight away. This reduces the risk of you forgetting to save it or, even worse, spending it.
If you’re using Employment Hero, you can divert different portions of your pay into different accounts, making it even easier to separate your savings from your daily expenses. Navigate to your employee file by clicking on Profile in the main menu, click on the Banking details tab and add new accounts and how much of each paycheck you’d like deposited into each.
4. Use cash
According to studies, we actually feel physiological pain when we pay with cash but not when we pay with credit. When we pay with credit, we put distance between our purchase and the pain of paying for it. If you’re trying to spend less, try withdrawing your cash for the week in one hit and paying for everyone in cash. It will also be a visual reminder as it starts to run out.
5. Track your progress
Reminders of how you’re going against your plan are excellent motivators. At the end of each week or month look back at how you’ve tracked. Congratulate yourself if you’ve been able to stay on track and celebrate how much closer you are to your savings goal.
If you did come off track, don’t panic. Use it as a time to reflect on why you came off track and what you can do differently to ensure it doesn’t happen again next time. The more you self-reflect and are aware of what causes your blowouts, the less likely they are to happen next time.