Have a look at our list of top tips for managing your house hold budget!1. Collect information (perhaps in a notebook or Smartphone app) on what you have been spending. Use this information to work out your budget (spending plan).
2. There are lots of different forms you can prepare your budget on, such as budget worksheets, forms or on the Sorted website.
3. Once you have done your budget, you will have a surplus (money left over) or a deficit (spending more than you earn). If you have a surplus, that is great and you can use that money to save and/or achieve your goals. If you have a deficit, go through each line of your budget and see if there is any way to increase income or reduce expenses. For example, you may be able to ‘shop around’ and get cheaper insurance.
4. For each expense, consider if there is a way to spread the payments, for example:
– School expenses (not school donations, which are voluntary) – depending on the level of your child (primary, intermediate or secondary), see if you can set up a year-round payment of $5 or $10 a week, rather than having a lot of large expenses at the start of the year.
– Medical expenses: if you have Doctors’ visits more than twice a year, see if you can pay $5 per week to the Doctors, so you are in credit when you go.
– Power – see if you can pay a set amount each week, all year round. This will ensure you get the prompt payment discount (approx. 15%) automatically and prevent getting large bills in the winter. If you feel your power bills are too high, consider what you can do to reduce them.
– Warrants of Fitness/car repairs – if you regularly have car repairs each time you need a warrant of fitness, think about setting up a regular payment to the repairer (or set aside money in a savings account).
5. Think about Christmas expenses: You may want to save via a Supermarket Christmas Club or the Warehouse Christmas Club. With these clubs, you do not receive interest but can buy more items with the money saved. For example, if you have saved $5 per week with the Warehouse club, and have $200 by 1 December, you can buy $220 worth of items.
6. Bank fees – you should not spend more than $5 per month on bank fees, discuss with your bank what you can do to reduce the them. Only use ‘your’ bank’s ATM machine and ensure you do not go into overdraft.
7. Transport: even if you have a vehicle, you can still think about using public transport sometimes. If you are 65 or over, buses are free between 9.30am and 3pm. If you only use a car once a week (say to go to the supermarket) it would be cheaper to sell your car and take a taxi once a week (or share a taxi with a friend).
8. Telephone expenses – if you have mobile phone, make sure you are not spending more than $19 for calls, data and texts. If you have a monthly account, these are far more expensive than ‘prepay’ phone packages. At the end of your monthly contract, switch to a ‘prepay’ deal.
9. If you are paid fortnightly, think about what works for you eg you may do your big grocery shop in week 1 of the the fornight, then in week 2 of the fortnight, fill up your car up with petrol (and just get a minimal amount of groceries eg replenish fruit and vegetables) .
10. If you want a holiday in a different part of NZ, consider ‘swapping’ your flat or house with friends in another city for a few days or a week. This is especially good if you have children, as you can use their toys.