HOW TO CONSTRUCT A BUDGET
“Rather than thinking of budgeting as deprivation, think about the fact that you’re now telling your money where to go, instead of wondering where it’s gone,” says Katie. Follow these five steps:
1 Break down your current income by source and frequency.
2 Investigate where you spend money. Print out your bank statements from the last 12 months (or at least three months).
3 Understand your expenses. Categorise them into fixed costs (such as insurance and rates) and variable costs (ie petrol). Remember to include occasional expenses, such as gifts and medical bills too.
4 Set budget.the I ask my clients to determine how much they would like to spend on an annual basis and we break this down to quarterly check-ins with weekly targets.
5 Track your spending. To stick to a budget, you need to stay connected with your outgoings. If you start running over in areas, you’ll have to make different choices going forward.