Living Within Your Means

Do you feel like you have no control over your finances? Does it feel like you are constantly spending more than you make and you never seem to be able to keep up with your bills? If so, you are not alone, thousands of Australians are finding it hard to make ends and are living paycheck to paycheck.

If you have been living in a circle of debt and stressful bills, there is help available. It takes some patience, hard-work and determination, but you can develop the skills needed to live within your means and get ahead – its really not that hard!

Creating a Budget (Might sound boring or like a hassle but it isn’t)
The first step in getting on top of your finances is to have a complete review of the household expenditures – you must compare your incoming cash versus the out. A detailed budget will allow you to do this quickly. Even if you think you know how you spend your money, you’d be surprised what a real budget will reveal.

Get the resource you need for a budget here, or better yet, login to your online banking. Most banks now have free financial tools attached to your general accounts which provide you a detailed budget of your actual spending habits. These tools are also interactive which allow you to manage your money even better. As an example, if you bank with the NAB check out Money Tracker.

Do You Need It or Want It (Simple question to ask before purchases)
Oftentimes, when people shop for items they do not take the time to consider if they want something or if they need something. Take time to consider each item before purchase. Ask yourself, can I live without it? How will it benefit the family? Do I really need it or just want it? Can I afford to purchase it without overspending or borrowing? These simple questions before purchasing can really assist you with cutting down on frivolous spending – landfills are filled with want items

Give Yourself Some Strict Guidelines (Depends on your discipline)
Once you set a budget which includes a new monthly allowance, set some strict but doable spending guidelines for yourself. Create a system for buying the things you want, such as determining how to pay for it before purchasing it, or saving up over several weeks or months before purchasing it. These guidelines can help you curb your spending and really think before you make a purchase. Also, set a guideline for yourself to monitor your spending and budget on a regular basis. Without proper monitoring, it is too easy to slip back into the same old routine.

Use the SMART Plan (Puts things into perspective)
The SMART plan can help you set financial goals and keep them. Here is a look at the SMART plan and how to make it work for you. This is obviously a general plan that can be modified to fit yours or your families personalities and needs.

You must set:

•  Specific Goals. Any financial goal should be specific and clearly understood by all members of the household.
• Measurable Goals. Whenever you create a financial goal, you should also develop a way to measure the success or failure of that goal.
• Attainable Goals. Be realistic when setting a financial goal. If your goal is unrealistic, you are likely to get discourage and nor follow through with your plan.
• Relevant Goals. Make your goals relevant to your current situation. Do not think too far in the future, but rather remain relevant to your life today. Your financial goals will continuously change over time, so you can make changes later to reflect future goals.
• Time-Related Goals. Multiple short-term goals that contribute to a big goal are great confidence builders. They make the bigger goals more achievable, and will allow you to enjoy little wins along the way.