Budgeting Can Be Sexy

We all know that it’s important to have a budget in place, to know where your hard-earned dollars are going and how much you should be saving. But…I think we can all agree that budgeting can be very boring and mechanical, and is rarely something we look forward to doing.

Allow me to let you in on a little known secret, Budgeting is Indeed Sexy. A recent survey revealed that 75% of people think that it’s important to find a partner with a similar financial philosophy to your own, but most importantly, 55% put budgeting and saving as the hottest financial philosophy they look for in a partner.

Today, I’m going to give you some simple tips to make budgeting simple and even, enjoyable for you:

  1. KISS Principle – Keep it Simple…

Avoid making your budget too detailed that it becomes burdensome to keep track of it. Keep your expenses in broad categories that make it easy for you to maintain it. If you identify areas in your budget that need work, tackle one at a time. Life is here to be enjoyed so don’t be too hard on yourself. By making small changes on a regular basis, you’ll quickly find that you’re on the path to success!

  1. Make Small Changes

Let’s take a look at some simple ways to save a fortune by eradicating some ‘small’ expenses in your everyday lives:

  • Coffee: Instead of buying your ‘skinny long macchiato’ every morning from your favourite café, you could be learning to enjoy instant coffee. By reducing your coffee expenditure, over a 20-year period, you could save an extra $41,000.
  • After-Work Drinks: With the price of alcohol being so high in Singapore, after-work drinks with colleagues and friends is a popular destination for the disposable income of many. Assuming the average price of a drink is $15, and you consume 3 drinks, let’s look at what cutting your after-work drinks from 3 nights to 1 would do for your savings. By making this reduction, you could save an extra $181,000.
  • Dining Out: How much could we really save by eating at home. Let’s assume that on average you spend $100 for a nice meal out with your friends or significant other and that you currently do this 3 nights per week. How much could you save by cutting this down to 1 night..? A whopping $401,000.

Delayed gratification can do wonders for your savings. By making small changes to your everyday activities, you can experience abundant gratification later in life.

  1. Stop Trying to Find the Perfect System

There is no perfect way to track and stick to your budget. Whether an app on your phone works best for you, or a good old notepad and pen, if it works for you, then stick to it. Ensure that you have a regular time scheduled to track your expenses, whether this be each month when you go through your credit card statement or at the start of each new week.

  1. Focus on the Goals

Why have you decided to set a budget in the first place? To simply track your expenses and know where your money goes each week is hardly an exciting goal, and is unlikely to keep you motivated to stick to your budget. Ensure that you have a clear goal in mind for why you’re budgeting in the first place. This could be to reach your retirement goal of spending your ‘golden years’ sailing the world, or simply being able to afford that 2-week holiday to Bora Bora at the end of the year with your family.

By remaining focused on positive outcomes of your budgeting, you can ensure that you remain focused and motivated to continue to stick to your budget, and even find new ways to save that little bit extra.

  1. Track Your Net Worth

Do you know what your current net worth is, in financial terms? Your net worth can be calculated by subtracting what you currently owe, from what you currently own.

Net Worth = Total Assets – Total Liabilities

For example, you might own an investment property currently valued at $1,000,000, on which you have a mortgage of $600,000. Your net worth is currently $400,000. It can be a valuable tool to track your net worth each year, with the help and guidance of your Adviser if you work with one, to ensure that you remain on track to achieving your financial goals.

  1. Automate to Accumulate

With our busy lifestyles, we can easily find that there just aren’t enough hours in the day to do everything we’d like to do. When it comes to budgeting, an easy strategy you can put in place is to automate as much as you can. We can easily set up GIRO / Direct Debit systems to cover all of your regular bills. It’s important to do the same with your savings and investments and that you pay yourself first. Automate your savings wherever possible and you’ll quickly find over time, that your net worth climbs much faster than you may have thought possible.

The ‘out of sight, out of mind’ principle works wonders when it comes to saving, and by automating your investments, you’ll find that budgeting and reaching your financial goals becomes much more achievable.

 

I hope you’re able to implement some of these simple steps to achieve your own financial goals.

 

To your financial success!

Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants providing specialist financial advice and portfolio management services to international and local professionals in Singapore.

Book a complimentary consultation here.

 

Jarrad Brown is the trusted fee-based financial adviser in Singapore working with professional expats in the region. An Australian qualified and experienced Financial Adviser, Jarrad provides specialist advice to Australian expats as well as other nationalities.

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