More often than not we are happy to get on the budgeting bandwagon for short periods of time, eager to save up for that holiday or new car.
But, as we sip cocktails on a beach in Hawaii feeling satisfied about a job well done, the gratification is short-lived.
Soon, we’re back at square one, wondering where all the fruits of our budgeting have gone.
If this sounds like you, you could be one of the many Aussies treating their budgeting and saving like a fad diet.
The reality is we live in a consumer-driven world where we would rather buy now and suffer the consequences later.
Meaning, despite our best efforts, we can quickly lose focus and momentum in our financial goals, all long before we see any substantial results.
I often have new clients who come to me and tell me they are excellent savers with reasonable incomes, but have nothing to show for it.
It’s always a case of retracing their spending to identify the problem. Most of the time there is major financial leakage – which is easily fixed once you know how.
Afraid of missing out, many steer clear of budgeting and are more inclined to live it up rather than put away the credit card.
But budgeting doesn’t have to mean sacrificing every little life pleasure, but rather being more money conscious and tracking spending.
Much like brushing your teeth, you should manage your finances and track spending habitually.
It could be as simple as cutting back on those takeaway coffees in the morning or taking a good look at unnecessary subscriptions that have built up. A few dollars here and there can quickly add up to hundreds of dollars a year.
Track your spending regularly – there are plenty of free apps available – some even link with your bank account directly to track purchases. Or you can do it the old fashioned way with a notebook and a pen. This makes it easy to identify unnecessary spending habits and become more conscious of your budgeting needs.
With Christmas spending behind us, many of us will be feeling the pinch. Now that the new year is underway, it is more important than ever to be conscious of your spending and to not let the next festive season rip a hole in your savings plans.
Focus on a savings rate at over 10% of everything you earn, no matter the time of year or the extra costs that come your way.
Then collect these savings in your home loan account, that will save you interest over time. This will surely outperform – and bring greater rewards – than any excessive Christmas spending.