Are You Making One of These 5 Common Budget Mistakes?
If you don’t know where your money is going, and if you’re not diligently saving it, you’ll lack the resources to build a comfortable future for yourself and your loved ones.
A budget, or spending plan if you like, is simply a tool…nothing more, nothing less.
And since it’s a tool, you’ve got to use it yourself…you can’t count on it to do the hard work for you!
That said, however, you can make your budget fit you and your lifestyle, not the other way ‘round.
If your budget isn’t doing its job, or you’re having a tough time sticking to it, perhaps it’s time to take a closer look at what you’re doing.
It could simply be a matter of a few tweaks here and there to get your financial life straightened out.
Here are some of the most common budget mistakes:
1. Using a budget to track bills, but not overall monthly spending
A successful budget will not only allocate your spending, it will help keep your spending aligned with your goals.
2. Failing to track your budget
Tracking your budget will also help you prioritise your spending.
For example, if you’ve decided to start investing in houses to make saving that deposit more of a priority you can adjust your budget more quickly if you’re staying on top of it each month.
3. Not tracking credit card spending
If, for example, you’ve set a budget of $50 per month on clothing, that figure should be maintained, whether you’re paying cash or credit.
Commit to paying off your credit cards in full…you should never use credit to fund a lifestyle your income cannot afford.
4. Setting an unrealistic budget
The same is true of your spending.
If you’re unsure how much you should set aside for each spending category, a quick check of the web will provide countless tips and strategies for setting a livable budget.
Don’t let your plans for tomorrow infringe on your life today. Balance is important to avoid burning out part way towards your goals.
5. Pick the right budget type for you
For example, if you’re uncomfortable with a “miscellaneous” category then don’t create one…use detailed categories to track your spending.
If an overview of your spending works for you, pick a budget management strategy that is less detailed…for example an “80/20” or “60/40” type of budget that involves spending percentages.
Consider factors such as your own personality, your patience for technology and your willingness to keep track of your spending when deciding on the type of budget and the process you’ll use (e.g. electronic or “old school” pen and paper).
No matter how much time and thought you put into creating a budget, remember that it’s a pointless endeavour unless you actually use it.
If you’ve set up budgets every year and failed at each one…not an uncommon thing to happen…get help.
Enlist the help of someone…a friend or family member is great, but even better, find a disinterested third party who can help keep you accountable. Ask him or her to routinely check in with your budgeting status until tracking your spending becomes a routine part of your life.
If you want more tips about your Property Investment strategy, book a FREE consultation with one of our expert Investment Coaches to discuss your situation and investing goals.
Take the Next Step
After a lot of bad news over the past 12 months – thanks a lot COVID-19 – it’s nice to be able to kick off 2021 with some good news. There’s going to be a lending boom which, if you have your property investment strategy in place, is going to make your life a whole lot easier so you can build your property portfolio faster and cheaper.
Like a fine wine, the value of property gets better over time. Traditionally, the more time you have an investment property, the higher the value will rise.
However, unlike your favourite Shiraz, property values can go up and down, and up again.
Getting to know how, why and who is valuing your property can help us understand what property to invest in.
There are three ways to value a property – and three very different people doing the valuing.
What are your Big Rocks this year? What are your Big Rocks for your property investing journey?
If you’re scratching your head and wondering if you’ve accidentally stumbled across a blog for construction workers, bear with me.
Big Rocks is a concept often used in business or life coaching to essentially describe your priorities. The theory is, if you don’t have clear priorities, or if you have too many, chances are you’ll let smaller issues distract you and ultimately fail in your goals.
Historically real estate has always been a good place to put your cash. It’s an asset you can feel and touch – unlike stocks or shares – which makes investors feel safe. And, in the right place and time, property can grow in value while you sleep, meaning as an investor you don’t have to do much to increase your personal wealth. But as investors, how can we better predict the next hot spots for real estate investment so we can get in at the right price? How do we know the best places to buy that are guaranteed to grow in capital value, return regular rent increases and ensure future personal wealth?
According to the Australian Bureau of Statistics, 99 per cent of property investors in Australia fail. In this instance, the definition of failure is failing to buy three or more properties. Failure is easy. It takes very little effort to be bad at something. Success is something you have to work for, something that takes time and effort. But if you’re willing to put in the hard yards, we know you can succeed. We know because we’ve helped thousands of Australians buy property that’s yielded millions of dollars of income. To understand how to succeed, we need to know why so many fail. People fail because …