How to fine tune your budget
This article is part of a fictional case study series following "Sarah", a typical first home buyer in Victoria. Read each article to follow "Sarah" through a variety of articles exploring issues related to buying a home.
Sarah was making good progress towards her deposit. But once you get into a groove with money, it’s hard to break out of it – and that can be both a good or a bad thing. Good in that you’re creating great habits, but bad in that you can often leave little savings on the table.
After all, a budget is simply about managing your finances to see how and when you spend your money. Looking deeper into the details can actually save you quite a bit of cash.
Just take a look at a few discretionary items on Sarah’s budget:
- $20 for coffee every week from a corner café.
- $2.50 twice a week for two cans of soft drink.
- $50 twice a month for ordering in.
That’s $200 a month right there - $2400 a year. Now, can Sarah afford those items? Absolutely. But when saving for a house, it’s best to tighten everything you can to make sure you don’t miss out. Just check out a few fine-tuning options Sarah made to her budget:
- She bought a plunger to make coffee at work instead of buying it.
- She purchased soft drink in bulk at the supermarket.
- She purchased a few ready-made meals.
That’s a significant amount of savings right there, all without giving up the things she loves.
Now remember, a budget needs to be fine-tuned over time. As your expenses change and your income – hopefully – goes up, you’ll need to figure out where you can save money. But remember, it’s all about value.
Just keep a tight eye on your budget when you’re saving, and stay vigilant. You’ll get there sooner than you think.
Sarah couldn't believe how much money she could save by just making a few changes. It's that extra money that can really help her save over time