How To Budget For The Future

How To Budget For The Future

Although it can be tempting to spend the vast majority of your income on luxury goods which you don’t need if one of your goals is to save for your future, it’s well worth learning how to budget properly.

How to Budget For The Future:

1. Be clear about your financial goals

It’s well worth writing down a bullet point list of short term and long term financial goals. As examples, one of your long-term goals may be to save enough money for a house deposit, whilst one of your short-term goals may be to save for a family vacation.

2. Make sure to save at least 20% of your income

It’s wise to save 20% of your income, spend 50% of your income on necessities such as bills and to spend 30% of your income on luxury items. The latter of which includes takeaway coffees, cafe meals, and designer clothes. If you’re serious about fast-tracking your savings, you may even choose to save 30% of your income by choosing to spend 20% on luxury items, instead of 30%.

3. Make use of professional budgeting applications and software

It’s well worth downloading a budgeting app to your smartphone, which will help you keep track of your expenditure. Each time you make a transaction simply record the details on your budgeting app and you’ll start to get a clear picture of your monthly spending habits.

After which, you may choose to make a few changes to your spending habits, in order to save money for the future, instead of wasting your money needlessly on unimportant items such as cable TV or take away coffees.

Alternatively, you may prefer to download professional budgeting software to your laptop, if you prefer to work with a larger screen and to use a proper full-sized keyboard to record your spending habits.

4. Consider talking to an experienced financial advisor to make the most out of your disposable income

If you have serious long-term financial goals such as purchasing a house or saving for your retirement, you may wish to book an appointment with a financial advisor, who’ll be able to help you budget for your goals. Some financial advisors may recommend placing a small portion of your disposable income into investment schemes as well as into long-term high-interest savings accounts.

5. Never pay full price for items

Whether you’re shopping for groceries, a new house or a brand new flat screen television, it pays to search for specials, instead of paying full price for items.

6. Consider purchasing pre-loved items in order to save money

One way to slash your spending in half is to get into the habit of purchasing good quality pre-loved items. As an example, if you’re looking to purchase a new office desk or a treadmill for your home gym, you can save hundreds of dollars by choosing to purchase a pre-loved, second-hand desk or treadmill, instead of purchasing a brand new item. If you look carefully, you may even be able to find items which are near new.

In order to budget for the future, it’s worth taking all of the six tips listed above to heart!