Top Features of a Successful Budget

doing a budgetIn all the budget bloopers and blunders seen, the same few problems keep popping up. To avoid them, here are the top ten most important features of a successful budget.

  1. Work your budget categories to fit your personal situation and your spending habits, not somebody else's.
  2. Make accurate income projections, not what you just hope for, and don’t forget about tax.
  3. The first line category is for your savings so you treat your savings account just as you would any bill you owe.
  4. Enough sub categories to give you a meaningful view of where your money goes and where you might be able to cut costs, but not so many that tracking is a chore that you'll soon tire of.
  5. Include expenses that don't occur on a monthly basis, such as vehicle maintenance, insurance, property rates, service contracts, etc.
  6. Regularly review expenses and brainstorm about ways to trim costs in each category.
  7. Out of pocket cash expenditure tracking and recording. Cash spending is the biggest leak in most budgets. Cash disappears quickly and if you don't write it down you'll have a distorted view.
  8. Realistic written goals. Budgeting isn't about only tracking your costs it's about setting financial goals (saving for a house deposit, a new car, getting out of debt, saving for retirement, kids education, travelling, etc.) and finding ways to meet them. Without goals, your budget is just a pair of unwelcome handcuffs.
  9. Look for spending patterns you may not have been aware of when you weren't tracking your spending and decide on any actions needed.
  10. Most importantly with a balanced budget the reward is internal motivation and a positive attitude!
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The information on this site is intended as a guide only. The information is of a general nature and does not and cannot ever constitute personal advice.
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