In this article, we share our top tips for budgeting for the new financial year, from creating a financial forecast to discussing money matters with your partner, setting savings goals, and using a budgeting app or financial planning tool.
So the end of the financial year is over, phew! You’ve probably had a few celebratory drinks with your co-workers, got all of your accounts in order, and are mentally preparing for what you might spend your tax return on. Maybe a fancy holiday in France? New shoes? Perhaps the latest drone or the new iPhone 7?
Whatever the case, the end of the financial year is a great time to wipe the slate clean, review your finances, and develop a new budgeting strategy for the upcoming year. Here are our top tips for getting the ball rolling:
1. Create a financial forecast
You wouldn’t go trekking into the snowy mountains for 6 months without checking the weather forecast. So why would you dive head first into the new financial year without checking your financial forecast?
Your finances are your lifeline — in order to weather the storm and reach the summit (aka Mt Wealth), you need to prepare for every possible outcome. Take a look at what you intend to spend this year. Do you have any big expenses coming up? Do you want to put a deposit on your first home or purchase a new car? What about your bills, rent, or mortgage payments?
You should also review your projected income. Do you expect to start a new business or make a certain amount of profit from your freelance jobs this year? Will you be getting a pay rise any time soon? What about your investment properties, shares, and bonds? Are you going to sell any large assets?
Use these projections to map out a plan and set target savings goals.
2. Budgeting with your partner
It may seem like common sense to include your significant other in your financial planning process, but it’s a step that many Australians seem to neglect (the divorce rate is proof of this).
Talking about your finances openly and honestly with your partner is a huge part of keeping a healthy relationship. Married or not, budgeting with your partner for the new financial year means fewer surprises and less arguments. By working as a team, you have a greater chance of realizing shared goals and reaching your financial destination sooner. Here are some simple tips for successful budgeting with your partner:
- Manage your money, not your spouse.
- Be honest and straightforward about your spending habits.
- Don’t beat around the bush. If you’re worried about money, say so.
- Respect what is important to your spouse, and trust that they have your back.
- Resolve your power issues and even the playing field, regardless of who earns the most money. You should both be rule makers and rule followers, not one or the other.
3. Invest in budgeting apps and tools
The new financial year could also be your motivation for (finally) seeing a financial planner or investing in a financial mapping tool. With so many great budgeting apps on the market today, it’s worth taking the time to do some research and track down the best tools for your unique financial needs.
Managing your personal and business-related budgets has never been easier with Financial Mappers. Check out our budgeting for beginners blog post today to find out how we can help you take control of your finances — it could save you a lot of time and money in the long run!
Glenis Phillips SF Fin – Designer of Financial Mappers