Managing your own finances is the hardest and most important part of moving out of home, but if you know how to do it properly it is a valuable skill.
Here are five important tips in managing your own finances:
Here are five important tips in managing your own finances:
1. Create a budget
A budget is an vital for everyone living by themselves!
A budget planner can easily be created in Excel, but the hard part is keeping it up to date and using it efficiently. You should record all of your expenses and income in your budget planner so you know where our money is going and how much you have to spend on each thing.
Here is an excellent Excel budget planner spreadsheet from ASIC MoneySmart:
A budget planner can easily be created in Excel, but the hard part is keeping it up to date and using it efficiently. You should record all of your expenses and income in your budget planner so you know where our money is going and how much you have to spend on each thing.
Here is an excellent Excel budget planner spreadsheet from ASIC MoneySmart:
ASIC Budget Planner | |
File Size: | 116 kb |
File Type: | xls |
You can also easily make your own by recording each expense and each income by creating a spreadsheet that states how much you need to pay for certain things or how much you earn from jobs etc.
2. Know your expenses and income
Everyone who manages their own finances needs to know what they need to pay and what they are earning.
Your expenses can be kept track of by recording all receipts into your budget planner each week/month and any payslips can be recorded to keep track of income.
This will allow you to plan your spending as well as allowing you to use your money as efficiently as possible.
Your expenses can be kept track of by recording all receipts into your budget planner each week/month and any payslips can be recorded to keep track of income.
This will allow you to plan your spending as well as allowing you to use your money as efficiently as possible.
3. Prioritise your expenses
To prioritise your expenses does not mean to decide on what you will and won't pay on time. It means to keep just the most vital expenses and try to get rid of anything you don't need! You should also carefully distinguish between wants and needs, as the lines can sometimes be blurred. It's okay to purchase entertainment such as Netflix, but try not to go overboard especially if you are on a tight budget! Getting rid of these unnecessary expenses can make a big difference to your budget and spending.
4. Control and pay off debt
Make sure you know your debts! Incorporate them into your budget planner so you know how much you need to pay each month or every few weeks and you can plan other spending around it. Another helpful and important tip is, when getting a loan, to find one with the lowest interest rate possible and shop around.
Never let your debts out of your control!
Never let your debts out of your control!
5. Contribute to your superannuation
Start a superannuation fund ASAP if you don't already have one. Every month, if possible, take 10-15% out of your income and place it in your superannuation fund. The earlier you start doing this, the better off you will be when you retire.