What is your budget like?

When you get a bank transfer with money to create your home income, what do you do? Do you pay the bills first, do the shopping, and save the rest of the amount? Do you only spend the whole amount at once? Do you invest any money? 

Whichever option is correct for your spending routine, you probably think about your priorities first, and then you decide what to do with the money next. Prioritising means different things for different people. Some people probably prioritise weekly spendings, such as bills, and grocery shopping. There are those who prioritise travelling and spend every cent left on planning new excursions. For others, entertainment is the most important thing. 

The basic thing to know about a good budget is that we don’t have to count every single dollar. Analysing expenditures doesn’t mean you have to lead a modest life, without any conveniences. The most important task though is to prioritise the budget. 

If we assume the average pre-tax income in Australia to be $92,029, we are able to save about $93 a week. Being able to double the weekly savings to invest the money into the share market, would give $81,614 within a decade, $298,206 in 20 years, $873,013 in 30 years. Then, you may withdraw the money from your KiwiSaver, and you don’t need to be worried about your lifestyle after you turn 65. 

Do you know how KiwiSaver works? If you are eligible, your employer will transfer a minimum 3% of your before-tax pay. You may also expect up to $521.43 each year, paid to your account by the government. Such savings may be used to buy your first home. 

Prioritise consciously 

Most people are usually dissatisfied with the amount they manage to save. There are a few reasons for that state, most of them connected with prioritising. 

Several fixed expenses must be covered first, such as bills and rent. However, we often make sending choices quickly and spontaneously, without second thoughts if we really need a tenth pair of boots. That’s why you have to prioritise consciously, not in the moment of shopping. 

Conscious prioritising means you have to make sacrifices somewhere to save as much as you want. Don’t make long-term prioritising, which refers to big changes in life. For example, you’re thinking about your career change just to save more money in the future. Such a way of planning procrastinates your savings and the time of becoming a millionaire.

How to prioritise?

The first step you definitely need to take is the analysis of your expenses. Think how important they are to you. Are they really necessary? Are you sure you want to eliminate dollars so save and invest for the advantage of a new watch (while the current one is still in use)? 

No one can tell you what expenses you should prioritise - you have to make up your mind. Bear in mind though your aim is to feel happy with the values of your spending and saving too. 

Any change in the amount you spend will affect the saved amount. Check the amount constantly, to see the progress and not to lose motivation. Don’t give up too quickly, as effective prioritising doesn’t come at once. It sometimes requires a few attempts to reach the moment you’re happy with your savings.