Budgeting 101: Save, pay down debt and achieve your goals

Want to save money, pay down debt, achieve your financial goals faster and live well along the way? These budgeting tips for beginners will show you how to make a budget that works and reveal the secrets to keeping your budget—and financial goals—on track.

The benefits of budgeting
Budgeting is boring, right? True, budgeting itself might not make for riveting conversation, but the goals it can help you achieve most certainly do. Holidays, a house deposit, having a baby, launching a business, retiring in comfort, shopping without guilt, and so on, are all benefits that can come from budgeting.

What is a budget?
Imagine you were heading off on a long trip across the country. You wouldn’t just start driving. You would first look at a map to plan your route. You’d look for rest stops, petrol stations, sights to see along the way. The alternative, without a map or GPS to guide you, is that you could take the long way, go in the wrong direction or go nowhere at all.

The same can be said about your financial goals: the best chance you have of achieving them is to have a plan. Yet the majority of people have no financial map at all. Money comes in and money goes out, which can lead to a lot of driving in circles!

In contrast, a good budget is like a map for your money. It will show you the fastest, most efficient path to reach your goals. If something unexpected happens along the way (eg. your cat needs emergency surgery), your budget can even help to recalculate the route.

Of course, if you’re new to budgeting you might be wondering if this money mapping is going to be time consuming or difficult. We won’t lie—creating a workable budget does take a little time. But we promise the results are worth it. We also promise that budgeting reduces financial stress and uncertainty, which gives you more financial freedom in your life, not less.

Budgeting tip #1: Start with why
Why do you want to make a budget? Are you saving for something special? Trying to pay down debt faster? Perhaps you’re tired of living week to week or sick of running out of cash before payday. There are a million good reasons to manage your money better with a budget.

Budgeting tip #2: Don’t overestimate your income
Your income is any money you receive or get paid throughout the year. As well as salary and wage payments, you may also have income from other sources, such as child support, a pension or dividends. If you have joint finances, make sure you include you and your partner’s income.

What if your income is inconsistent? Casual and contract work, commission-based sales, self-employment and other types of work can result in pay cheques that go up and down. This makes budgeting more challenging because there isn’t a set amount of money coming into your budget every pay cycle. If this describes your situation, the safest approach is to base your income on your lowest paycheque or monthly average.

Budgeting tip #3: Don’t underestimate your expenses
A common budgeting mistake is to include only essential, fixed expenses in your budget (eg. rent/mortgage, groceries, transport, utilities, insurance etc). However, for your budget to be realistic, it needs to include all of your discretionary expenses too.

Essential expenses describe items you need to live. Think needs: housing, food, transport, medical and electricity bills.

Everything else you spend money on are discretionary expenses. Think wants: restaurant meals, coffee, fashion, tech gadgets, memberships, subscriptions, home renovations, trumpet lessons, and so on.

It’s these little discretionary expenses that can add up quickly. The best way to uncover them is to go through your debit and credit card statements for the last three to six months. Use two different coloured highlighter pens to code your expenses as essential (needs) or discretionary (nice to have but not necessary).

Budgeting tip #4: Take the whole year into account
A common budgeting mistake is for people to base their budget on their pay cycle or the calendar month. Budgeting your monthly expenses and income is a good start, but the challenge comes when an annual or quarterly bill pops up. Suddenly, there is not enough monthly income to cover the budget’s usual monthly expenses plus, for example, annual car registration.

By creating a 12-month budget, your entire year of finances is mapped out. For a lot of people, this is where they discover why their finances feel like ‘one step forward and two steps back’.

On a weekly basis, it looks like they live within their means. But it’s the annual accumulative effects of kids’ birthdays, Christmas presents, car rego and servicing, power and water bills, council rates, and so on, that make it impossible to save.

Budgeting tip #5: Prioritise your expenses
At MyBudget, we organise our clients’ expenses into ‘streams.’ These get prioritised in order of importance. You can do the same with your budget. For example, essential living expenses (eg. rent/mortgage, electricity, petrol, groceries), will take priority over ‘Netflix’ or ‘Takeaway Food’.

Ranking your expenses is an excellent way to make sure you meet your most important obligations first. It can also reveal where you can trim the fat. New budgeters often ask themselves questions like ‘do I really need Foxtel, Netflix, Disney-Plus, Stan and Kayo?’

Budgeting tip #6: Build flexibility into your budget
You know the biggest challenge with budgeting? Life! Just when everything is going well, your car breaks down, water heater fails, or a global pandemic hits. This is why you need to build flexibility into your budget.

The way to create a flexible budget is with savings. This is money you set aside regularly that builds up into an emergency fund. It should have its own stream in your budget. To differentiate it from other saving goals, you should call it something like ‘Emergency Fund’, ‘Rainy Day Savings’, or ‘Buffer Money’.

Keep this money in a separate account or subaccount for safekeeping. It doesn’t matter if your savings start out small. Even just $5 to $10 a week will snowball over time. You can also top up your emergency savings with one-off payments, such as a tax refund, bonus or birthday money.

Budgeting tip #7: Budgets that don’t balance
A balanced budget is a budget where your income is equal to or greater than your expenses. With budgets that don’t balance there is more money going out than coming in. The danger in this case is that either your savings are going down or your debt is going up. This is how a debt spiral can begin.

So, what is the right approach with a budget that won’t balance? The first step is to congratulate yourself. Instead of hiding your head in the sand, by creating a budget you have a powerful money management tool that can help you to understand, explore and fix your financial situation.

Start by making changes to your budget to see what effect they have. These are all scenarios that can be explored with your budget:
● What if you were to trim your expenses?
● What if you were to refinance or consolidate your debts?
● What if you were to negotiate lower payments with your creditors?
● Should you sell an asset?
● What if you added an income stream to your budget?

Importantly, unlike Band-Aid measures, budgeting helps to uncover and fix the root of financial problems. And by getting to the underlying cause, you have the opportunity to stop them from happening again. In fact, with the right budgeting system, you have the foundation for lifelong financial success!

MyBudget is the worry-free way to manage your money

Whatever your financial goals, there is a MyBudget solution to help you reach them.

To find out more, call 1300 300 922 or enquire online today.

Get skilled for work with TAFE Queensland

Employment opportunities continue to explode in Australia, with 13 consecutive months of increased job vacancies – so if you want to get skilled for work, now is the time to check out TAFE Queensland’s Gold Coast campus Open Days in August.

On Wednesday 4 August, visit the Trades Open Evening at the Ashmore campus from 4pm to 6:30pm. This campus is the Gold Coast’s biggest and best Trades Training Centre which boasts a new $10.5 million facility for students studying building and construction.

On Saturday 14 August from 9am to 12pm, the Coomera Creative campus will open the doors to the public. This one is for the creatives, innovators and entertainers with courses in music, screen and media, interior and building design, IT and cyber security, blockchain and more.

Tour the campuses, chat with experienced teachers and explore several career pathways with courses to suit everyone from certificate’s right through to diplomas and bachelor degrees as well as apprenticeships and traineeships.

TAFE Queensland General Manager on the Gold Coast, Karen Dickinson said there is an increasing need for industry skills across many sectors in Australia right now.

“The Australian Government’s Vacancy Report revealed almost a quarter of a million roles available in May 2021 – the highest job ad volumes in more than 12 years,” she said.

“With an employer satisfaction rate of more than 93 per cent, TAFE Queensland has a unique relationships with industry to ensure all courses meet current and future employment demands.”

Ms Dickinson said TAFE Queensland’s Open Days are a great opportunity to determine if a course is the right option for you and will help you to focus on a career and ultimately the job you want to pursue.

“Anyone who is interested in studying to gain the skills they need to get a job, including those considering a career change, should come find out their options at our Open Days,” she said.

“We ensure our students are job-ready with ‘real world’ industry learning experiences integrated into our courses which sees almost 87 per cent of our graduates going onto work or further study.”

TAFE Queensland Gold Coast Open Days in August will offer something for everyone from school students to hobbyists and up-skillers to career starters and career changers.

For more information or to register to attend the Open Days go to tafeqld.edu.au/news-events.

Budgeting in July for a fun and affordable Christmas

Is it too early to talk about saving for Christmas? Ho, ho, no! It’s never too early to plan for the festive season. Here are Christmas saving tips to put cash in your cracker and help avoid a New Year credit card hangover.

Christmas is sneaky, like a ninja
Christmas happens on the same day every year, yet manages to catch us by surprise. How does that happen? Christmas is like a ninja. One minute it’s tax time and, the next, every shop has fake snow in the window.

If you’re like most people, you have excellent Christmas intentions. Every year you plan to finish your Christmas shopping early and every year you find yourself in a flat panic with only a week to go.

If Christmas weren’t stressful enough, Covid has turned up the heat even higher. Global logistics chains are interrupted and stock shortages are everywhere. It all adds up to even more reasons to get your Christmas ducks in a row.

1. Make your Christmas gift list
Christmas gifts are one of the biggest festive season expenses. Grab a piece of paper or open the notes app on your phone and create your “nice” list. These are the friends, family members and work colleagues you’d like to buy Christmas presents for this year. You can also jot down any gift ideas that spring to mind.

2. Create your Christmas budget
Creating a Christmas gift list is a great start. Now, you need to work out what’s actually affordable. The free MyBudget Christmas Budget Calculator is designed to help you create a financial plan for the festive season. As you add your Christmas expenses and allocate an amount of money to each, the budget calculator will update and show how much you need to save. Don’t forget to include all the little hidden costs—Christmas food, entertaining, decorations, wrapping paper, and so on. Use the free calculator to adjust your spending and come up with a Christmas budget that’s realistic and affordable.

FREE DOWNLOAD: Your Free MyBudget Christmas Budget Calculator

3. Find more money to save
But what if you get stuck? What if money is tight and you can’t find any spare cash to save? You’re not alone. Millions of Australians rack up Christmas spending on their credit cards. No wonder the holiday season often feels less festive than it should. But the good news is that most people have spare cash hiding in their spending habits.

4. Automate your Christmas savings
Now that your free Christmas budget planner has revealed how much you need to save, the next step is to open a dedicated Christmas savings account. The key is to separate your Christmas savings from your everyday money, so you don’t accidentally spend it. You can set up an automatic transfer between your own accounts or an automated pay disbursement with your payroll manager.

5. Do your Christmas shopping early
The mid-year sales are nearly upon us, not to mention Black Friday sales in October. Use these sales events to do your Christmas shopping early. This also leaves plenty of time for shipping. But whatever you do, don’t get hoodwinked into impulse shopping for things you don’t need. Stick to your gift list like egg to nog.

6. Manage expectations
With retail inventory levels low across the country and incoming freight in short supply, this could be a good year to shop for second-hand, pre-loved presents on Gumtree and Marketplace, or at your local thrift shop. Start early so you can keep your eyes peeled for quality items, such as second-hand bikes, toys, fashion and furniture.

7. Don’t forget to budget for fun
A common oversight at Christmas is to budget for gifts, then overlook the added costs of Christmas food, entertaining, drinks, Christmas decorations, wrapping, work parties, going out, Uber fares etc. Make sure you include money for fun in your Christmas budget. After all, that’s what budgeting is for—to make sure you have enough money to afford the things you love!

8. Factor in any income changes
Does your workplace close down over Christmas? Do you take unpaid leave? If your income might be affected by the festive season, make sure you factor reduced pay into your Christmas budget calculations.

9. Start squirrelling away Christmas items
It’s not too soon to start stashing Christmas food, decorations and other items when you see them on sale. Stock up on food that can be frozen, such as meat. And non-perishable items, such as serviettes, paper plates, wrapping paper and gifts.

10. Spread the love by sharing the load
Organising Christmas doesn’t need to fall on the shoulders of one household. As you’re planning Christmas, talk with your friends and family about ways to spread the load. Can each person bring a dish to share? Or chip in money for a combined Christmas food budget? You can apply the same approach to gift-giving. Secret Santa is a great way to keep Christmas spending under control, especially with big families and work teams.

11. Avoid a Christmas debt hangover
There’s nothing worse than waiting for a big, ugly credit card bill to arrive in the new year. And who says Christmas has to be expensive? The “perfect” version of Christmas, with mountains of presents and all the trimmings, is designed by retailers to sell us things we don’t need. Instead, plan the perfect Christmas for you. How about a picnic? Or sausage sizzle? Or build-your-own-burger? There are infinite ways to affordably celebrate being together at Christmastime.

12. Be like Santa and ask for budgeting help
Everybody knows that Santa doesn’t make Christmas happen on his own. Aside from the amazing Mrs Claus, he has a whole team of helper elves. The same goes with taking control of your money—you don’t have to do it on your own. For free help with budgeting, talk with us at any time. MyBudget’s expert money elves are always here to help!

MyBudget is the worry-free way to manage your money

Whatever your financial goals, there is a MyBudget solution to help you reach them.

To find out more, call 1300 300 922 or enquire online today.

Bernard’s career hits the right note

After finishing high school Bernard Houston went to university to study entomology and turn his passion for science into his career. He never imagined he could ever craft a career as a musician.

His love for scientific research meant that his passion for music would be a hobby, and he never imagined he could ever craft a career as a musician.

But after being invited to jam blues music with other musicians, he saw that a music career was a distinct possibility.

“I was the only one who turned up to jam with a flute, so I was the only one invited back,” grinned Bernard.

“Turns out, the world needed more jazz flute!”

Armed with his flute and musical knowledge, he began playing in bands, writing songs, recording albums and playing cover gigs to pay his rent.

“It’s what you did in the community – you looked after each other. And the more I did it, the better I got at it, and I started working my way up to writing music for films, theatre and cabaret productions, and I was having a lot of fun!”

The more Bernard wrote, played, jammed and recorded, the more his desire to expand his musical knowledge and write the best music possible became.

Knowing that a career as a composer was his future, Bernard began looking at university courses that would expand his skills.

Then, a chance meeting with a TAFE Queensland teacher put him on the study path to the perfect solution.

“My neighbour had studied music at TAFE Queensland, and during a street party, I met his teacher, Dr Ross McLennan.”

“After discussing my career aspirations with him, I quickly realised that the University of Canberra course hosted by TAFE Queensland was the one for me as the course offers popular, classical and film music.”

So he enrolled to study the Bachelor of Creative Industries (Contemporary Music Practice) (ARB403) to turn his love of music into a career.

During the course, delivered in partnership with the University of Canberra, Bernard developed a broad range of specialised skills and knowledge, thanks to its hands-on training, that he is now using in the real world.

“Studying was wonderful, and I learnt so much about electronic music, how to write a film score, various classical composition techniques and how to write a fantastic pop song. I also learnt how to define and market myself as a creative practitioner while making excellent friends on my journey.”

“It was so great that I came back for more, enrolling into the honours program to embark on a project that brought together everything I learnt plus linked in my day job as a facilitator.”

His “Symphony for the Third Millennium” project saw Bernard work with Traditional Land Owners and other community members to research his neighbourhood’s history.

“I used that history as inspiration for a “Symphony for the Third Millennium, which final work included strings, woodwind, turned percussion, guitar and a stack of electronica,” he explained.

Now that he’s finished his studies, Bernard is turning his attention to helping other creatives realise their ambitions through the Switchboard Project.

“The Switchboard Project brings together painters, poets, musicians and other performing artists to co-design and co-deliver a series of arts events that activate under-utilised spaces here in Brisbane.”

“Over forty artists took part in a brainstorming session, and we finished with a series of quarterly events that we are now delivering to exhibit artists’ works, performances and symposiums,” he said.

Bernard is now as far from being a scientist as you can be and enthusiastically using his skills to support the creative community while expanding his musical knowledge.

“When I enrolled, TAFE Queensland’s website asked, “where can TAFE take you?” and it has provided me with the opportunity to gain academic and professional skills and the capacity to do more with my life, and for that, I am truly grateful.”

How to Turn Your Tax Refund Into $40K

It’s tax time and most people will be looking forward to a tax refund. What are you going to do with yours? Save it? Spend it? A bit of both? Here are six different ways to make your tax refund REALLY work for you.

More than four out of five Aussie tax payers get an annual tax refund and the average value works out to be $2574 (which is the number we’ve used for the calculations in this guide) — a very tidy lump sum! That’s a lot of money when you consider its buying power.

Alternatively, you could put your end of financial year (EOFY) cash injection into reducing debt or building up savings. Is saving and investing boring? Maybe. Or perhaps it’s exactly the financial boost you’ve been looking for! This could be your chance to upgrade your financial outlook for years to come.

Let’s compare the numbers:

1. Spending spree
Spending your tax refund isn’t a bad thing if you’re buying things you really need. Come July, retailers are going to be bombarding cashed up shoppers with EOFY sales and it could be a great opportunity to grab a bargain.

If so, use it to your advantage. Make sure you shop around and don’t be shy about asking for a cash discount, especially on big ticket items.

2. Reduce your credit card balance
Do you have a credit card balance? Tax-time could be your lucky break. Consider this: Paying off the average credit card balance of $3200 by making only minimum repayments would take over 26 years and more than $10,000 in interest charges (ouch).

But if you were to pay a lump sum off your balance equal to the average tax refund ($2574), you would halve the total repayment time and save over $7000! Wow. That’s because paying off your credit card balance is the equivalent of earning savings of 18 to 19% interest per annum.

3. Pay it off your mortgage
Imagine we told you that you could double this year’s tax refund over the life of your mortgage. Well, you can! On a 30-year $400,000 mortgage at 3.08% per annum (average variable interest rate at 1st March 2021) making a single lump sum payment of $2574 could save you around $3600 over the life of the loan.

Not bad, but we can hear you thinking “$3,600 over 30 years isn’t exactly earth shattering”. Fair enough. So, consider this instead: If you were to take the same mortgage and make an extra $2574 lump sum payment into it every year for the next 10 years, you’d cut multiple years off your mortgage and save around $25,000. That’s a lot of holidays.

Couple that with a meagre 0.5% reduction in your mortgage interest rate and you could save nearly $40,000 more. To see how much time and money you could save by making lump sum voluntary payments or a better deal on your mortgage, use our home loan calculator or talk to the MyBudget Loans crew.

4. Create an emergency fund
One of the foundations of financial fitness is having a savings net to fall on when things go wrong. Perhaps your dog needs surgery, your car breaks down or life just happens. Rainy day savings can be the difference between having cash to fall back on or going into debt. Having an emergency fund is also how you build flexibility into your budget.

The way to build up your emergency savings is to automatically transfer a small amount of funds from every pay into a dedicated bank account – preferably an online account that makes it more difficult to access your savings from an ATM.

If you’re finding it hard to get your emergency fund started or struggling to keep enough spring in your safety net, your tax refund is the perfect way to give your savings a rocket boost. Discover how much money you need in your emergency fund and the best way to save for it.

5. Boost your super
What about investing your tax return? You don’t have to hire a stockbroker or financial advisor or know your fixed rate bonds from your pink sheet stocks to invest your tax refund.

Most working Australians have a superannuation account. Super is a way of saving money while you are working, so that you will have money when you retire. Boosting your super can have amazing benefits for your retirement outlook, as well as potential tax advantages. Your super fund will be able to help you with the tax implications of a lump sum investment.

6. All of the above
It’s not as if you have to commit to just one of these strategies. Why not set aside some of your tax refund for spending, some for saving and some for debt reduction?

Wondering how to put your tax refund to the best use? MyBudget can help to design a customised budget plan that shows exactly what you can achieve with your money over the next 12 months and beyond.

MyBudget is the worry-free way to manage your money

Whatever your financial goals, there is a MyBudget solution to help you reach them.

To find out more, call 1300 300 922 or enquire online today.