Think back to your first job, I bet the pay cheque wasn’t huge but you somehow managed to fund all things you did on that wage. Now think about how much you currently earn. Sure, you can probably afford nicer things; cars, clothes, TV’s but I bet you still wish you had more money.

They key to making what you have work is a budget. Yes, I know that the word budget can make even the most seasoned finance professional cringe but a budget doesn’t necessarily have to be a complex spreadsheet; it can be as simple as setting a financial goal and then working towards that goal.

Say you want to spend $10,000 on an overseas trip in two years’ time. Instead of waiting out the two years and then putting $10k on the credit card, why not work backwards and put aside a little each week to reach your goal? To save $10,000 over two years you would need to set aside around $190 per week.

Now instead of having your savings mingled in with your everyday account why not open a high interest savings account (all the banks have them). Set it up so that $190 is automatically sent to the high interest account each week. This way you will reach your savings goal without having to think about it, or “accidently” spending the money.

Using a separate account and automatic payments is a great way to budget without too much work. In my opinion, this method works well for short term savings goals. If you are saving for something over the longer term (e.g. house deposit, child’s education) then you may want to consider other options like fixed interest investments or investments tailored for longer timeframes (such as shares or property).

The beauty of budgeting this way is that you can still spend the money in your everyday account but at least your savings are automatically squirreled away without you even having to think about it.

Hewison Private Wealth is an independent financial advice firm. Our advisors are highly qualified wealth managers and superannuation / SMSF experts. If you would like to speak to a financial advisor on how you can secure your financial future – in the short and long term – please contact us 03 8548 4800, email [email protected] or visit www.hewison.com.au

The information provided above is general information only.  It does not consider your needs, financial situation or objectives. You should seek specialised advice from a qualified financial adviser