Tax season is well and truly underway, which means that it is time for you to get your finances in order. Compiling all your receipts from the previous financial year can be pretty daunting and also confronting when you learn how much you’ve spent on non-claimable items. But with every lemon, you can always make lemonade. Now that you’ve had a confronting look at your finances, it’s time to reassess your budget and get on top of your flamboyant spending.
Review your past budgets
It’s important to review your budgets from the past, so you can see what did and didn’t work. You’ll always be bound to make mistakes and mishaps in your budget and by reviewing them, you’ll be able to see the flaws and improve on them for the coming year. Noticed you were spending way too much on your gym membership when you only go once in a blue moon? Cancel it and sign up to casual sessions when they suit you or hit the ground running and avoid the expense all together.
List your tax deductions for the coming year
If you are planning on buying tax deductible items this year, make a list beforehand, so you can budget these expenses across the year and prioritise them. There is no point in blowing all your money in one hit and then attempt to save for the rest of the year, because it just won’t happen. It’s in our DNA to be inclined to purchasing things when you have the money, so spread your planned purchases out and you will get more of a kick out of saving. Plus, this gives you more of an opportunity to pick up some bargains during sales periods that you wouldn’t have gotten if you didn’t do your research and wait!
Weight up your expenses
It’s always hard deciding what expenses should make the cut and what shouldn’t, because most of us just want it all. That kind of lifestyle is unattainable, but if you want to continue keeping up with the Joneses, review your expenses and see what you can cut down on. For example, you might not have gotten your insurance premium re-quoted for the last few years and you could be in with a surprise deduction as your experience on the road has increased over time. You might also be living in a terribly expensive apartment that your roommate has just moved out of and you have been footed with the entire weekly rent. It might be time to switch things up and go for a cheaper option or move in with friends. The opportunities of limiting your expenses are endless.
Set goals, and tackle them
It’s all well and good to set goals, but the challenging part is actually sticking to them and seeing results. If you want to save $1,500 every month, you actually have to make it happen yourself. It’s hard to begin with, but by starting small and increasing over time will make the process a whole lot easier (and more enjoyable to keep up with your lifestyle).
By keeping honest with yourself when saving, you will be more likely to see results. Don’t buy something one week in the hope of budgeting it in for the following week, so you don’t ‘lose’ any money. If you keep this kind of habit up, you’ll see yourself transferring out of your savings more often than you’re putting in which is the opposite of a healthy budget. Plus, you don’t have the New Year’s Resolution tag haunting your goals which means it isn’t guaranteed for failure.
But don't neglect yourself
Starting out on a hardcore budget means you’re going to crash and burn soon enough. It’s an inconvenient truth, but nonetheless accurate. If you completely rule out anything that brings your happiness, you’ll start to resent your budget and in due time give up on it completely. So, if going out to the movies once a fortnight with your friends brings you happiness, don’t give up on it. Make sure it fits in your budget, and maybe just skip the snack bar to reduce spending. You don’t have to live like a hermit to save money. Shocking, but it is possible to have a good time while on a budget – you’ve just got to prioritise!
So, get ready to hit the ground running with your budget after you’ve submitted your tax return. It’s time to throw away your past budgeting flaws and start fresh with a new financial year. You might even be able to add in a couple of tax deduction buys for your next tax return.
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