Ep9: How to create a Budget.
Actually, you know what?
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Just give up on owning a house.
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You have no willpower and you have no dedication.
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So just keep renting and complaining that life's too hard.
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It's actually much easier to do it that way.
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For everyone else, keep listening.
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Welcome to the Home Loan Insider.
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I'm Max Lending, your industry insider, and we're lifting the lid on the finance market, guiding you on how to cut through the jargon, manage your finances and get investing into the property market.
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Not long ago when I got paid, my money wouldn't even last one day.
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Here's a little story and you're gonna love it about how I learned how to budget.
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that hasn't got you G'd up, I don't know what will.
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And you've guessed it, today's episode is about budgeting.
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So you know the drill, get comfy, get that cup of coffee, and let's get stuck into it.
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In typical Mac's fashion, we're straight into it.
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Let's kick off with what is a budget?
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Think of it like a roadmap, a roadmap to your finances.
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It helps you track your income, track your spending,And ultimately highlights where the hell your money goes each month.
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Now, I might be a little bit over the top with my numbers, but you need to know your numbers.
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I cannot drum this into your head any more than this.
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You should know exactly how much you spend each month on particular categories.
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Even more, you should exactly know what's coming in each month as well.
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It's the fundamentals that's needed to understand.
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exactly how much you can save and where you're spending.
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Now don't fret peeps, Max has got you covered.
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Head over to our website, that's weekendinvestor.com.au.
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I've also left a link to the website in the description of the show.
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From there you'll be able to download your very own budgeting calculator.
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Now I've just listed why you need to do a budget, but the main question is how do you do a budget?
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It's actually not all that hard.
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Lots of people build it up to be some really big complex thing, but in reality it isn't.
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So let's walk through how to create a budget.
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First, you need to identify your sources of income.
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This is the fun stuff.
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This is all the money coming in.
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So this could be your salary, your partner's salary, bonuses, overtime, Centrelink, interest received from like a high yield savings account, any side hustles, any other source of income where you're actually receiving money.
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And once you know what's coming in, you need to know what's coming out.
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So this is the non-fun stuff.
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You need to categorise your expenses and break them down into things like fixed costs that you know, like rent, utilities, variable costs like going out, having dinner.
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There's a lot of different variable costs, but on the we can invest the budgeting calculator, we've actually done most of the hard work for you and we've broken down the common expense categories.
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These are being your home, debt payments, categories like groceries, food.
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There's a whole lot there.
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I'll let you check it out.
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Now here, right at this step, this is where most people fail because they don't want to get into the weeds and understand all their expenses.
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And guess what?
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They sit down and they guesstimate.
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Guesstimating is your worst enemy because.
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You're not going to remember all your expenses.
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And most of the expenses that you think you only spend, it's actually like double or triple.
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So you go, oh, when I go out, I only spend $100.
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But then you forget about all the other things you did.
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Well, we went for drinks afterwards, et cetera.
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Best place to start is actually to log on to your bank and download the last 30 day statement.
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Now, download your credit card statement and your working account statement.
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This is where the majority of all your expenses are going to be coming from.
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Most banks let you download this in an Excel format, so if you can, download it that way.
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From there, you're going to go through each purchase for the last 30 days and add them into your budgeting calculator as you go.
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This shouldn't take very long.
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This will give you a great start to find out what your monthly spend is.
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And from the calculator, you can then annualize that out pretty quickly.
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Now, for the real number nerds out there,The best way to actually do this is to download the last three months worth of statements and go through each transaction.
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But in reality, this is actually really time consuming and I recommend only doing it if you are like one of those dedicated people who want a very clear understanding of what your expenses are.
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For everyone else, stick to monthly.
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It won't take too long and you'll actually see this to the end.
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If this sounds all too hard for you, just give up now.
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Actually, you know what?
04:55
Just give up on owning a house.
04:57
You have no willpower and you have no dedication, so just keep ranting and complaining that life's.
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Hard.
05:02
It's actually much easier to do it that way.
05:04
For everyone else, keep listening.
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So you finish the budget, OK?
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And now you're like, OK, well, I've filled this budget in.
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What do I do with it now?
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At the Weekend Investor, we like to use the budgeting tool to help you save for the deposit for your next property or for your first property.
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But really, you can use it to save for a holiday, for a wedding, pay down debt quicker, or even an emergency fund.
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Pretty much anything that your heart desires.
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It's all about making intentional choices with your money, and budgeting gives you the financial understanding to actually do that.
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We know numbers can be boring, so we've added graphs to easily visualize where the money's coming in and going out.
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Seeing your figures like this is a game changer.
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You can really get a shock on seeing how much you overspend in areas you didn't even know existed.
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And that's a wrap for today, guys.
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Just a quick episode so you guys can get started on your budgeting journey.
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Remember, budgeting is not about restriction, it's about freedom and taking control of your money.
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After you've done your first budget, set some goals and you should always be looking to review this budget and adjust.
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Probably about what, every three to six months, download a new bank statement and then go through it and do it all again.
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Life changes and so should your budget.
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To download your free Weekend Investor budgeting calculator, head to weekendinvestor.com.au.
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Link is also available in the show description.
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If you have a question that you would like answered on the show about budgeting, mortgages or finance, then drop us a line either via our socials, e-mail or website.
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Details available in the show notes.
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Any opinions and views expressed in this program are just that opinions.
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All information is general in nature and should not be seen as financial, economic, legal, investment, accounting, or tax advice.
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This program makes no representation or warranty as to the accuracy or completeness of any information contained in this program.
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You should consult a professional advisor in relation to your own personal circumstances.