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7 tips for sticking to a budget

Finance & Money

Posted on Wednesday, November 14, 2018

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One piece of financial advice that you have no doubt heard more times than you can remember is ‘create a budget and stick to it’. While it may be a cliche, creating a budget is the most important first step to gaining control over your money. It sounds easy enough, but sticking to a budget is like going on a diet – it involves discipline and denying yourself things that you really want. Because of this, many home budgets will end up failing.

 

However, it doesn’t have to consist of complicated spreadsheets and tedious updates. Find out what works for you and your home budget and ignore the rest. Here are 5 fail safe tips on getting to grips with budgeting, for people who don’t like budgets.

 

 1. Figure out where your money goes

This is the first point of call. It’s easy with online banking, just download your account transactions for the last three months and dedicate a few hours to going over everything. You may be shocked to discover where your money is actually being spent and how much of this expenditure could be avoided. 

 

 2. Get a budgeting app

There are many free budgeting apps these days that will help you stay on top of where you are with your money. We do everything else on our phones, and budgeting doesn’t have to be an exception to this rule. Daily push notifications will encourage you to stick to your goals, not least because constant updates on your financial status will either shame you into sticking to your budget, or encourage you to continue spending wisely. It’s win-win!

 

 3. Automate everything

To make your financial plan as easy as possible, set up separate accounts for each of your savings goals. If you’re saving for a plane ticket and a new car then have an account for each of these goals. Each time you get paid, transfer the money immediately, or better still, set up direct deposits so you don’t even see the money in your account. This will help reign in any impulsive spending and ensure your savings plan gets priority.

 

 4. Pause before you spend

We live in a time where everything is set up for immediate gratification. You want something, you just need to go online and buy it. However, if you take a few days in between when the need hits and when you actually buy, you may well realise that you don’t want it that much after all. Things quickly lose their appeal, and in the meantime, you have avoided spending money unnecessarily.

 

 5. Set savings goals

Staying away from the money building up in your savings account is easier if you have a goal in mind. You want to save for a holiday in Mauritius? Stick a beautiful island picture up near your work computer, and if the urge to spend outside of your budget hits, then a glance at the picture will remind you what you’re saving for. Having something tangible to save for will help keep you motivated.

 

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