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Budget tips for a prosperous 2021

The pandemic has been difficult on everyone and almost all of us are slightly changed from who we were before. Priorities have changed, work habits might be different and the things we want for our future somehow seem clearer than they did previously.
 
Many people consider renting ‘dead money’ but the notion of that disregards the fact everybody’s got to start somewhere right? It’s true that knowing you’ve spent $20,000 or more in a year on ‘a place to stay’ can be confronting. Tenants do have some power though and living in a rental property is a great way to transition through life stages, rather than leap into them – especially for those without family support. 
 
Being in a rental property means you’ll mostly have fixed expenses and are in great position to make some plans for your future and start achieving your goals around property and prosperity. Whether it’s getting together a deposit to buy property, buying a new car or planning a grand adventure, there are plenty of ways to make small adjustments to your everyday life, that will boost your savings and get you closer to achieving your very best life.
 

Budget, budget, budget

There are most definitely things in your current budget (if you have one) that you do not need. If you don’t even have a budget, then that’s your first job – write a budget. It’s great to have a budget that shows you real time balances too. Find yourself a good budgeting app or go old school and make a spreadsheet. The important thing is that your expenses are less than your income, then you can try to increase that difference each month and shuffle the extras into your savings like it never existed. A personal budget can be great fun, as long as you find a good balance and be sure not to deprive yourself of everything. You may choose to take the extreme option and buy nothing for a year or give yourself a modest quarterly budget for clothes and non-essential things.
 

Earn more money

Stage one of budget hell is seeing that your income is way less than your expenses. Stage two is cutting back all the fun and finding there’s still no money. So, stage three is finding ways to earn more of it! There are the classics like walking people’s dogs, or looking after people’s kids, but they’re not for everyone. The gig economy is a great way to make some extra cash – with plenty of options for general life jobs waiting for you online, giving you the flexibility to as much or as little extra work as you please. Fiver is just one option, as is Uber or one of the many ride share companies currently in operation. If you own a car, there are also numerous car sharing platforms that allow you to rent your car out at an hourly rate for a few hours or a weekend as you choose.
 

Look for cash boosts

There can be financial rewards to spring cleaning, especially if you unearth enough treasures that someone else will happily hand over cash for. From Facebook marketplace, to gumtree.com and eBay – you lose nothing by giving it a try. You may have thousands of dollars sitting under your nose in unused appliances, or designer clothing that no longer fits. Every little bit helps and spending a month or two spring cleaning and selling stuff can be the ideal way to get your nest egg started and motivate you to action your budget in the year ahead. It also clears out the cupboards for when you move in a year!  
 

Where can you cut costs?

It can be really hard to save if there’s nothing left over after all the bills are paid. Living from pay to pay is stressful and demoralising, so even if you can find an extra $10 here and there, you’ll motivate yourself to find more and save more. We all have a lot more incidental spending in our life than we know. From spontaneous coffees and extra purchases at the petrol station, to going with the flow when dining with friends – it all adds up. If you have a regular brunch date with friends, why not suggest rotating it around people’s houses instead? You could downgrade the viewing options on your Netflix account, or talk to your phone provider about shifting to a cheaper plan. Start focusing on outlet or online shopping, over boutiques and department stores. Allocating yourself pocket money and physically having that cash in your wallet can be useful because you have a visual experience of what’s available to you. Once it’s gone it’s gone.
 

Lock in some savings

Once you’ve established how much extra cash you have left each month, it’s a good idea to lock in savings habits so tight you don’t even know they’re there. A great hack is to round up your rent. For example, if you currently pay $1,800 rent, and there’s room in your budget to do so, why not ‘decide’ your rent is now $2,000 a month and bank the difference as savings? Not only does this allow you to stash some cash away, it also gives you some practice at paying a mortgage!
 
If there’s still money left after that, choose a reasonable percentage or amount – maybe 10% of your income, or even $100 a month - and lock that in as your monthly savings goal. Having fixed decisions around these things means you can sustain your savings habit. Also watching your savings grow is really motivating – it impacts on both your spending and saving habits, making you think twice about buying things you don’t need and inspiring you to save more than your fixed amounts, so you can watch your savings grow faster.
 

You do you

This is a tough one, but it’s coming more naturally to many of us in the pandemic world. So often, we end up going to things we’re not really interested in. Or doing things we get talked into, when really it was just easier to go along with it, than to have to let someone down. But your goal right now is bigger than that and the good people in your life will support that. What you do with your time is your choice and saying ‘no, sorry I can’t – I have plans’ can be really empowering.
 

Put Your Money in Good Places

This is one of the most important steps to take, because not only do you want to save your money when you get it, but you want to maximize your opportunities for its growth too. Interest is another income source and the more you save the more you’ll earn, so take some time to work out where your savings will go and make sure you put your money in good places.

 A high interest savings account with no card access and a delayed transfer time is very useful for your immediate savings. You can manage your monthly budget through your normal accounts and then transfer your savings every month across. Having a good system of accounts also helps you have short term goals – you have a monthly transfer to look forward to but you can also set a goal of $5,000 or $10,000 increments and transfer to a good short-term deposit – say 3 or 6 months – when you reach those goals.
 

by Celine Battendier