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Budget Tips: Your Salary

The funny thing about money is that making more of it won’t necessarily solve your financial woes. In fact, some people fall into even bigger debt once they start making more money. The simple truth is that there are budgeting techniques everyone should use whether they are making $25,000 AUD or $125,000 AUD.

Photo: Douglas Kelley

Collect all the data and put it on paper.

You may need to dedicate and entire day to this task depending on how messy your finances are. Simply collect all your financial data and put it into two separate charts. The first chart will include all of your income: salary, side business, and otherwise. The second chart will list off all of your current expenses, fixed and unfixed.

This will give you a visual so you can see exactly how much money is coming and where it’s going. Once you have this part figured out the rest will come easily.

Cut unnecessary expenses

Do you really need an expensive gym membership? Can you cut some of your electricity and water use? Do you need a non-fat upside down mocha Frapuccino everyday of the week? Find out where you can make some cuts and adjust accordingly.

This doesn’t necessarily mean cutting everything that is unnecessary out of your life. After all, it is nice to have a little treat sometimes, just don’t overdo it. For example, cutting back on your coffee shop cappuccinos to twice or even three times a week can still make a tremendous difference.

The 60% Budget

A popular budget is the 60/40 theory. The basic premise is that 60% of your budget goes into expenses while the other 40% goes directly into savings. You would be surprised at how easy it is to cut down your expenses to 60% – and that’s including the occasional treat or splurge!

Keep your accounts simple.

There really is no reason to have multiple checking accounts unless you have a separate account for a business that you run. With multiple accounts and no organization you will have a hard time keeping up with everything and may not even be able to track how much you spend.

However, having separate savings accounts that link to your checking account may prove to be beneficial. That way you know exactly what you are saving for in each account.

Leave the credit card at home.

My credit card is locked away in a desk and only used for emergencies. If you are living on a tight budget there is no reason to add expenses to your credit card. Additionally, there is also no reason to have multiple credit cards at once.

Have some sort of secondary income.

Many financial experts will tell you that depending on one income is not enough. Simply put you need to have your regular check in addition to your hustle check.

Making extra money doesn’t have to be very daunting or time consuming. Thanks to the Internet it’s now easier than ever to make some extra money, whether you run ads on a website or make some extra cash writing.

Making a budget and sticking to it is one of the key ingredients to having a stable financial portfolio. Whether you’re making minimum wage or rolling in the dough, keeping these tips in mind will help you stay out of financial trouble.

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