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A budget is telling your money where to go instead of wondering where it went.

Avoid these bad budgeting mistakes

The financial decisions you make (or don’t make) today will inevitably affect your future.  Good budgeting practises now lead to a more financially secure tomorrow and bad financial habits can sink your future into debt.

Whatever your negative habits are with money, you can change them.  It can be hard to break lifelong patterns but knowing the common bad budgeting mistakes will reduce your odds of making them:

Bad Budgeting Mistake 1# Not writing down expenses

It’s impossible to stick to your budget if you don’t know where your money is going . It’s very easy to forget the small things such as a parking receipt but over time these things can eat into your budget.

The easiest way to remember everything you buy is to update your budget regularly, every day if you can while your purchases are still fresh in your head. You could also make a note in your smart phone to enter in as you go! or make all your purchases with the same debit or credit card and keep track online through your bank app.

Mistake #2 Impulse Buying

Chocolates at the service station, takeaway coffees at your local cafe and checkout items especially if made weekly add up quickly as well. These seemingly inconsequential purchases like chocolate once a week, are costing you $8 a month, or almost $100 a year. Writing down even those minor $1 purchases every time can help you spend more wisely in the long run by seeing the bottom line effect they have.

Mistake #3 Busting the budget

Blowing the budget happens. You go out for dinner that turns into drinks after. You go shopping expecting something to cost a certain amount of money that you’ve budgeted for – but it’s more or you buy additional items. And this happens a lot but how?

These things do happen, however, if you know that you have a tendency to buy more than just one thing when you go to the store, or if you know that your friends have a tendency to change their plans, either avoid these activities or create a bigger budget for them ahead of time.

Mistake 4% Setting Vague Goals

Saying “I’m going to save” without determining how much by what time frame won’t set you up for success. Set some realistic goals with a specific and detailed action plan. For example, rather than saying you’ll save money, say that you’ll increase your superannuation contribution by $1,500 a year. Instead of saying you’ll spend less, say that you’ll cut $30 a week from your grocery bill or limit yourself to one takeaway coffee a week.

Mistake #5 Making things complicated

Budgeting doesn’t have to be hard. You don’t need to create an elaborate system or use special budgeting tools to develop a realistic spending plan. You can simplify your budget by easily keeping a running total of your expenses using your smart phone or even an excel spreadsheet while having the freedom to update and adjust your budget regularly.

Correcting these mistakes will help realign your budget and financial goals. You can find more helpful budgeting articles from our previous blogs here:
  • 4 tips to change your financial life and make it stick
  • How to break the cycle of debt
  • How to take control of your money now
The easy ways to conserve energy in your home

The easy ways to conserve energy in your home

Saving on energy is certainly a trending topic and more than ever consumers are needing new ways to save. The good news is you don’t have to overhaul your home to make it more energy efficient. There are many simple things that you can do with a small amount of money to save energy at home.

Here’s our 5 top ways to get you started:

1) Full Loads

Only run your washing machine, dryer or dishwasher when they are full and use energy saving settings where you can. By not using heat setting on your dishwasher and washing machine you can save as much as 20% on your electricity bill

2) Turn off when not in use

Did you know that 75 percent of the electricity used to power home electronics is consumed while the products are turned off? And 6% of our nation’s energy consumption is from these unused appliances? (according to a Berkeley University report 2015). Unplug appliances and electronics when not in use to instantly save energy, or for a simpler way, plug your appliances into a power strip that way you only have one power source to remember to turn off.

3) Energy efficient appliances

If you’re in need of some upgrades, especially when it comes to every day appliances such as toasters, kettles and other low cost items switch to energy efficient ones. Same goes for refrigerators and washing machines. Most new appliances come with an energy star rating and can use up to 50% less energy than your old appliance.

If purchasing a new home or renovating, when choosing your toilet, appliances, showerheads, and tap mixers, look for fittings that have a high WELS rating. A 3-star rated showerhead only uses around 6-7 litres of water per minute, while regular showerheads can use up to 25 litres per minute. The money you save on electricity (and water) will make up for the cost of your new appliance!

4) You don’t live in a lighthouse

An oldie but a goodie… remember to turn lights off in unoccupied rooms, something we tell our kids! When replacing bulbs, use energy-saving fluorescent lights for areas of the home that need constant lighting. Fluorescent lights are often brighter than regular lights so you save energy. Using these type of bulbs will save about $30 over its lifetime and pay for itself in about 6 months. It uses 75 percent less energy and lasts about 10 times longer than an incandescent bulb.

If purchasing or renovating a home, go green by installing large windows to bring in natural sunlight and save even more!

5) Keeping cool (or hot)

When the hot weather arrives people usually either open their windows and doors for relief, or those who close up in the early morning to protect against the heat.

If your home is well insulated closing up will save on air-conditioning and energy costs. If it’s poorly insulated it will be better to open up. Either way, you’re best opening up some windows and doors to let your home cool down naturally overnight.

Simply by circulating air, freestanding or ceiling fans can make a huge difference to your comfort and your energy bills in hot weather.

There are many conserving resource websites out there when it comes to designing or renovating your home as well. Making a few small changes to the way you use energy could make a difference to your next energy bill. What could you do differently to conserve energy and save money?