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“You must gain control over your money or the lack of it will forever control you.” – Dave Ramsay

Truly so, planning your savings and investing them wisely from an early age is the most effective formula for building wealth. And going by a report published in June 2015 by Suncorp Bank, Gen Y seems to be totally in line with the view.

five-elements-of-good-household-budget

According to the report, those falling in the 25-34 year age bracket comprise the best savers in Australia, saving $533 a month on an average, almost $100 more than $427 saved monthly by Australians on an average. The report also revealed some interesting facts with men saving an average of $507 monthly, compared to $346 saved by women. People in capital cities tend to save more (thanks to the bigger earnings) averaging at $478 monthly, with those outside the capital cities saving an average of $325. Further, Australians who invest in shares save an average of $669 a month while non-shareholders save an average of $346.

For Gen Y, high savings can be attributed to the fact that youngsters are staying longer with their parents, helping them save significantly on rentals. Several studies have also indicated that 90% of youngsters don’t fret spending their hard earned bucks on eating out and spilling social calendars can often translate into empty pockets.

As more and more Australians become savvy savers, having a planned household budget can be an effective tool to help meet financial goals easily. Here are some tips to help you save effectively by having a good household budget.

1. Planning a budget – In order to prepare an efficient household budget, it is important to have a track of every single expense you make. Make a log of how much exactly you earn each month and meticulously write down wherever you spend. Do not miss any expenditure, however frivolous it may be, to get a clear picture of your spending habits. Using an online budget calculator can help you quickly plan your budget.

2. Need it more, want it less – When you make a budget, the first thing you will notice is the unnecessary monthly expenditure that can be easily avoided. Maybe you could forego the weekly massage and go for it fortnightly? How about carrying home cooked lunch to work? Do you know Australians spend maximum on food, and this one small change can have massive health as well as financial benefits.

While it is not possible to cut down on necessities, it is a good idea to optimize your budget by giving priority to things you need the most.

3. Spend smart, save smart, earn more – Open high interest rate saving accounts to get more interest on your savings. Using a credit card if you understand the plastic game can also boost your savings by taking advantage of the travel miles and reward programmes. If you have a home loan, keeping your money in an offset account linked to the mortgage can help save thousands of bucks over time. Read here to know more.

You can also boost your earning, consequently savings, by doing some volunteering work or using your hobbies to earn some cash. Having a yearly garage sale of unused Christmas presents and other items can also raise significant amounts of money.

4. Choose the right home loan – In case you have decided to buy a piece of the Australian dream, we suggest you compare home loans to get the most competitive rates. It is important to take a home loan tailored to your requirements, and talking to a mortgage broker about your requirements can help them suggest a suitable product in line with your financial goals. Speak to an expert broker at HashChing to have your queries addressed for free.

5. Educate yourself – Investing in knowledge reaps far more than investing anywhere else. And with the ready resource bank available on the Internet, it has never been easier to educate yourself. Constantly scan the net and financial magazines for new investment products and stay updated with ideas to save more.

Planning a budget and following it will help you achieve your financial goals on time. However, a good budget is a flexible one. Revisit your budget regularly and make changes as per your requirement to stay motivated.

By Vidhu Bajaj

 

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