How well do you budget?

When you’re paying off a mortgage, budgets matter. Knowing how much money is coming in and going out will not only help you manage your monthly repayments, it will also ease stress and give you confidence in your financial situation.

So what makes a good budget? Here are three tips to organise your finances.

Track what you spend

All those morning coffees add up over a year. Start taking note of what you spend on a daily basis. Download an app, start a spreadsheet or use a good old fashioned notebook. Whichever way suits you, keeping record of every cent you spend is the first step in creating an airtight budget.

You might be surprised to find money that can be saved (or redirected) when you see your daily spend written on paper. And the good news is that it’s not something you have to do forever. Tracking your expenses for a month or a fortnight is all it takes to see your spending habits.

Organise your expenses

You have more than mortgage payments each month. Take some time to organise your expenses. We all have regular payments - phone bills, water, electricity, gym fees, private health cover - the list goes on. When doing a budget you can plan for these bills and even put aside money for them.

Have a look at your bank statement and take note of the regular outgoings. When you’re going through this list of expenses, factor in special occasions too - birthdays, Christmas and planned holiday. Having a clear understanding of what payments are due now and what’s coming up will help bring your budget to life and make sure you still get to enjoy the special things.

Write it down

Budgeting isn’t about cutting your spending, it’s about identifying the areas that you want to spend and save money and making sure you stick to it - perhaps you want to pay off more of your home loan and spend less on other areas.

It’s important to actually write a budget - you’re much more likely to stick to something you can track. When you’re doing your budget. include both your expenses as well as a savings plan and make sure you revisit it regularly to make sure your budget is still working for you.