The must-have budget strategy
Those wanting to save must take some simple steps with their finances or risk being left disappointed when they can’t achieve their goals, writes Sophie Elsworth
HOPEFUL savers are setting themselves up for failure by trying to get their finances in check but neglecting to set out a plan of attack.
Already three weeks into the new year, new AMP research shows that one in three Australians have good intentions to improve their financial status, yet about the same amount of people believe budgeting is too much effort.
And for those who do bother to take the time to set up a budget, about one in four people say they won’t end up sticking to it.
AMP Bank’s director of retail solutions, Michael Christofides, said the word “budget” can turn people off and sticking to “old-fashioned” methods of organising cash often sets people up for failure.
“These methods include trying to keep a budget on a piece of paper or setting up an Excel spreadsheet and entering your budget in there,’’ Mr Christofides said.
“This means that you have to go back to these spreadsheets and update what has happened versus the budget and keep doing that.
“But the good news is there are technologies and apps that you can download on your phone and you don’t need to use these old-fashioned methods any more.”
Many online tools, including Moneysmart’s TrackMySpend free app, are good places to start.
The app allows users to record their expenses including a weekly household budget, nominate spending limits and separate wants and needs to help them on their way to financial success.
Rising Tide Financial Services managing director Chris Browne said managing expenses digitally is key and it can help you get closer to achieving your financial goals.
“Whether it’s saving for a holiday or committing to making your own super contributions every month, the main thing is that you have a clear idea of what you want to achieve,’’ he said.
“If you’re not sure where to start, once again, it’s a good idea to have a chat to your financial planner and ask for some help.”
The research also found that people keep on top of their finances by regularly checking their bank accounts (47 per cent), 28 per cent check their paper statements and others use an Excel document (20 per cent) to scrutinise their spending.