Budgeting while on an apprentice or trainee wage can be really difficult. It is easy to fall into a habit of living pay to pay without putting any money away for long term savings. Below we have outlined some simple steps you can follow to take control of your finances:
It is best to prepare a budget that aligns with how often you are paid – weekly in this case.
First you need to work out what bills you have that need to be paid and how much they cost you each week. Break your bills down into weekly costs to align with your budget. For example, a car loan that costs you $200 a month means you need to set aside $47 each week.
Top Tip: to find out where your money goes each pay period, look through your bank statements for the last three months. This will give you a good overview of your bills, spending habits and possible areas for saving. Don’t forget about your longer term bills though like car rego!
You then need to work out how much money you want to be putting away into a savings account out of each pay. Set a savings goal for the next twelve months and then work out how much you need to put aside each week to achieve that – but make sure this is realistic! Putting even just $50 away each week will get you over $2500 in a year’s time.
Whatever is left over after your savings contributions and your bills have been taken care of is what you have to spend on whatever you like!
Remember: find a saving account that suits you. Look for the best possible interest rate and make sure you are aware of any fees for the account – sometimes these can surprise you so make sure you do your research.
The most difficult part of any budget is sticking to it. As soon as you receive your pay transfer your savings funds straight into that savings account and make sure you are paying all of your bills on time! For more information on budgeting and for a free budget calculator head on over to MoneySmart.