How to create a budget in 6 steps
May 27, 2022

If you want to successfully control your spending and work towards a financial goal, you need a budget. 

Most people need to be able to see where their money is going each month. A budget can help you feel more in control of your finances and make it easier for you to save. The trick is finding a way to track your finances that works for you. 

If you want to successfully control your spending and work towards a financial goal, you need a budget. 

Most people need to be able to see where their money is going each month. A budget can help you feel more in control of your finances and make it easier for you to save. The trick is finding a way to track your finances that works for you. 


**What is a budget? **

A personal or household budget is a summary that compares and tracks your income and expenses for a certain period of time. While the word ‘budget’ is often associated with restricted spending, it doesn’t necessarily have to be for it to be effective. 


A budget will show how much money you expect to earn, then compare that to your required expenses like rent and utilities, as well as your discretionary spending such as entertainment. Instead of viewing a budget as a negative, you can view it as a tool for achieving your financial goals. 


Here are 6 easy steps you can follow to create a budget that works for you. 


Calculate your Net Income

The foundation of an effective budget is your net income. That is your take home pay - total wages or salary minus tax and other employer provided programs such as super. If you are self employed or have outside sources of income such as child support, include these as well. You can record these for any period of time but we recommend recording this total income as a monthly amount. 



If you are someone with a variable income, such as a freelancer or seasonal worker, consider using the income from your lowest earning month in the past as your baseline income for when you set up your budget. 


**Add up your expenses **

Once you know how much money you have coming in, you now need to work out how much is going out. Tracking and categorising your expenses can help determine what you are spending the most money on and where it might be easiest to save. 

Start by listing your fixed expenses. These are your regular monthly bills such as rent or mortgage, utilities, car payments, insurance etc, that generally stay the same each time. 


Next you need to list your variable expenses. These tend to change month to month and include things like groceries, fuel, entertainment and clothing. This is an area where you may find opportunities to cut back on. 


If you don’t have an ‘emergency fund’, include a category for surprise expenses that have a habit of popping up over the month, derailing your budget. 


If you are not sure how much you spend in each category, take a look at your last two to three months of credit card or bank transactions and make a rough estimate. 


Set Realistic Goals 

Before you start sifting through the information you’ve tracked, you need to determine your financial goals. What are you saving for? Are you working towards a specific goal such as buying a house or an overseas holiday? Or are you just wanting to save a certain amount of money by a certain period of time?


Remember, your goals don’t have to be set in stone, but identifying them can help motivate you to stick to your budget - it’s easier to cut spending if you know it’s for a cause. 


Create a Spending Plan

This is where what you're actually spending vs what you want to spend all comes together. Use the variable and fixed expenses you compiled to get a sense for what you’ll be spending in the coming months - compare this to your net income. Now set specific and realistic spending limits for each expense category. 


Depending on how seriously you want to cut your spending, you may choose to break down your expenses ever further - between things you need and things you want. For example, if you drive to work every day, fuel is a need. Your monthly Netflix or Spotify subscriptions are wants. This difference, between wants and needs, becomes important when you’re looking for ways to redirect money to your financial goals. 


Adjust your Budget 

Your budget needs to work for you and your lifestyle. It’s understandable that circumstances can change and our priorities can shift. Make an appointment with yourself every month or so to sit down with your budget and make sure it’s working for your current goals and realities - make adjustments accordingly. 


Make budgeting easier

To ensure you continue to stick with your budget, you need to make sure it’s easy. Nobody wants to sit down every month to review their budget if it's a chore. To make it easy, you may like to consider having separate bank accounts for each of your budget categories. For example, have a transaction account for bills and expenses, a transaction account for spending, and a higher interest savings account. 


You can then automate your budget by setting up a regular transfer into your savings account on payday and direct debits when bills are due. 


**Get in Touch **

Here at Central West Finance Solutions we pride ourselves on our customer-centric approach and our delivery of financial solutions to the people of regional NSW. 


Once you have reached your financial goals by implementing a budget, get in touch with us today. Our team of qualified brokers would love to help you with your financing needs.

6 Reasons why you should use a Finance Broker

December 1, 2022
Whether you’re planning on investing in rural or commercial property, buying an asset for your business, or purchasing your dream home, you will need to consider your lending solutions. While your first instinct could be to talk to your bank about a loan, there is another option that may save you time, effort, and ultimately money - that you won’t be able to get from your bank. Experts in banking and finance, Central West Finance Solutions will help you take the legwork, guesswork and stress out of securing a loan. Independent from a bank, we have access to a broad range of loan products, making us your new best (financial) friend. Choice of Lenders Finding the right fit loan is just as important as finding the perfect property. In the Australian market, there are now hundreds of lenders available and often, it can be hard to work out which one is right for you. As a finance broker, we don’t have access to just one lender’s products, we compare many products from a whole panel of different lenders. Knowing you have loan options is one thing, but having the confidence you signed the best deal is another. We can give you this peace of mind. With our industry connections, we will ensure that you are getting the best loan solution that suits your circumstances. Experience The team at Central West Finance Solutions has over 100 years combined experience in banking and finance. This means we can provide the best possible service and advice for any lending requirements. Convenience and Flexibility As a small, local business, we pride ourselves on our flexibility. Our team doesn’t sit in an office from 9-5 taking appointments. We are mobile and will happily travel to you at a time that works within your schedule. The beauty of technology means that we can bring all our information and online services with us. Thanks to this, you get the convenience of staying where you are while still getting the same great resources you would get from the office. Saves you time The choices available now in the mortgage and lending market can seem limitless and completely overwhelming. Not to mention, you are probably already time poor, with a limited capacity to take on more of a workload. While you can choose to research the subject, the lenders and their products yourself, securing a loan can be quite a process - particularly if you are seeking a good deal. So why not let us take care of the heavy lifting for you? As experienced brokers, we already have knowledge and information on the subject, meaning that sourcing quotes and talking to lenders will be much faster if we do it. We know that every financial situation is unique and there are certain products on the market that are tailored to particular purchases and financial profiles. Allowing a broker to be the middleman gives you the freedom to carry on with your week, while we compile a wide range of options that are short-listed for you. Tailored solutions that benefit you As locals we know you and we know what’s best for you. That’s why we know that the best deal is not necessarily the cheapest interest rate. We will thoroughly examine your circumstances and future plans to ensure we recommend a loan or financing solution that is right for you. We will work with you to determine your finance needs, repayment ability, and cash flow requirements to select a loan or financing solution suited to your circumstances. Unlike some brokers, we prioritise your needs over what might be easiest or most beneficial to us. We want to ensure you are looked after and not borrowing beyond your financial capacity. With that, we will manage the entire process for you. From application, through to settlement, as well as any on-going assistance you may need with your loan. Help you avoid pitfalls Due to the sheer amount of lending products available, it is easy to get lost in the jargon. Many products seem to offer great deals, but what’s the catch? While at the surface they look great, they may have hidden penalties, fees and charges that may not be visible to the untrained eye. There is more to a loan than interest rates and loan repayments. A trained finance broker will scrutinise the fine print for differences that may impact your bottom line. Some of the other elements they look for are flexibility and the ability to make extra repayments. Having someone walk you through the pros and cons of each option can be invaluable in identifying the most viable loan option for you. As a finance broker, Central West Finance Solutions can help you avoid taking out a loan you might regret later. The Central West Finance Solutions Difference Here at Central West Finance Solutions, we pride ourselves on our customer-centric approach. We live and work in your community. We understand your job, your business, your family, so we are empowered to make decisions locally, ensuring you don’t get lost in a maze of call centres, red tape and decision-makers. Many people that come to us have gotten sick of the lack of personalisation that comes with big banks and other large broking firms. We get to know our clients and their circumstances - that’s our difference. If you are looking for a finance broker that puts its clients first and values each of their unique circumstances, then get in touch today. Our team of friendly staff will walk you through your options and get you started on your new financial journey.

5 Home Loan money saving tips

December 1, 2022
We all know the song - ‘Give me a home among the gumtrees with lots of plum trees…’ The great Australian dream of owning a home has been part of our country’s identity for centuries. Of course, it was a much more affordable dream back then!  Saving money in today’s inflated world is no easy feat. Often daunting and oh so tedious, it’s understandable that young people feel overwhelmed by the thought of saving to buy their first home. However, we are here to tell you it’s not impossible! Just like anything, making a habit of saving by regularly doing it will help you stay on the right financial track and reduce the overwhelm. Your dreams are important to us and we want to make them come true. So here are 5 sustainable and realistic tips you can use to achieve your goals of buying your first home. Understanding your finances Assessing and understanding your financial status is vital to setting yourself achievable saving goals. In doing this, it is important that you have a solid understanding of the basics - like your net worth, your debts, interest rates and monthly expenses. Don’t let the jargon put you off. Finances seem like an intimidating area, however, with a little research and education, they really aren’t that scary! The best thing to do would be to speak to someone with knowledge in the field and start improving your financial literacy. Make record of your spending Once you understand what you are looking at, it’s time to start making records of your spending. Sit down with your bank statements and start the month with a certain amount of money both in your wallet and your bank account. At the end of the month, take note of everything you spent money on - each payment you made - and how much money you have left over. Completely go through your finances and analyse your spending. Note where your money is going and what you can cut back on. It’s also a good idea to list all major repayments that come up regularly. For example, car registration, health insurance, electricity bills etc. Make note of when they are due and add up how much you need to put aside for these. Based on all this information, set yourself a reasonable and realistic monthly budget. This should include a portion of your income going into a savings account each time you get paid. Set bite-sized goals Once you’ve decided an amount you can comfortably live off, based on your income and spendings, decide a reasonable goal for your deposit - then break it down. If you say you want a deposit of $40,000 it is going to seem an impossible ask. But if you set incremental, bite-sized goals, it can be done. Do this by setting monthly, biannually and yearly goals. As a first home owner it may be to put $1000 into your savings each month, pay off your debts within a year etc. As a first home buyer you’re currently exempt from stamp duty, but you need to remember you still need to put money aside for things like solicitors fees and pest and building inspections. Something else that is very important when considering your budget and goals, is that the deposit is not the only thing you need to consider. You also need to think about repayments - how much can you afford to pay each fortnight? What kind of lifestyle do you want? Use your budget to decide on the maximum amount you can afford to pay so you don’t find yourself overstretched later on. **Try pay off any debts ** Debt can sometimes affect how much someone is willing to lend you. It will be a big load off your chest if you can rid yourself of this before taking on a mortgage. Once it is paid off you are already used to not having that money. Try and put that money towards savings if you can. While this is definitely not essential, if your debt is under control, it will be a big help in the long run! Find an institution you can trust Taking out your first home loan is a daunting step into adulthood, but it can also be really exciting! Finding an institution you can trust is a huge part of this process. Here at Central West Finance Solutions we have credentials with numerous lenders via our aggregator Connective so we are able to source you a loan from a lender you know and trust. Are you ready to buy your first home? Get in touch today and we can help you get started on the process.
Share by: