Yummie Mummie

According to Gay Curtis, author of Smart Girls' Guide To Money and founder of MoneySmart Coaching, a budget is an incredibly powerful and compelling tool.

Gay says that the first step is to identify your goals. There is little point wasting time on a budget if you have no idea what you want to do with your money. “It is important to come to grips with what your goals are. “The first thing to do,” Gay recommends, “is to work out your goals for the short term, say two years; then the medium goals, three to five years; then the long term goals of six years and over. People should have a clear vision of what is important to them, so they are inspired to plan and create a budget that they can focus on and stick to. Without specific goals in sight, you will have nothing to aim for. Your money will be just whittled away from pay cheque to pay cheque. Goals for some may be a matter of reducing the household costs by a certain amount in order to make ends meet. For others it is about saving for their child's education, first home, new car, or overseas family holiday. As Gay says, “A goal lights the flame for the burning desire to follow your budget, so that you can successfully achieve what you want.”

The next step is all about commitment. When you have decided what you're aiming for, you then have to decide how you intend to achieve those goals? This is the easy part. The hard part is the discipline required to stick to it. Gay, a money coach and educator, says this is where so many people fail at budgeting. Gay attributes many failures to procrastination; some people just never seriously apply themselves. Many others that do get started quickly realize they are seriously in debt and give up. Others budget but don't commit to the budget. They get lazy and distracted with marketing hype and spending. Gay acknowledges that we are not taught to budget or manage our money successfully.

When you have identified your goals and set a realistic time frame, divide the amount you wish to save by a time period, say in months. But don't be unrealistic and try to save an amount beyond your capability. You'll soon give it up if you do.

Let's look at an example. Perhaps you would like to save for a family holiday at the end of the year. Say it will cost a maximum of $5,000, including spending money. Over a twelve-month period you will need to save, $416.67 each month. That's much more realistic!

To help save the allocated monthly amount, you might want to consider setting up an arrangement to ensure the money is automatically allocated to an account before it can even be seen and spent. “Putting aside money is an important part of budgeting,” says Gay.

Article supplied by Sonia Williams of http://www.showmummythemoney.com.au/. We show modern day mums how they can make the most of their purchases, how they can manage and grow their money, as well as leverage and protect the assets they have accumulated.