Page 6 - TP_Bugdeting_Booklet_A5

Basic HTML Version

5.4 Set up a separate savings account
Avoid the temptation of dipping into your savings for those one-off expenditures by setting up a
separate savings account. Use it only for making deposits and avoid linking it to a keycard so you can’t
access the money quickly.
5.5 Managing your debt
Short-term debt, like a personal loan or credit card, can be convenient and useful. But it’s vital that
you stay in control of repayments to ensure your debt doesn’t become a burden you can no longer
service. Clearing your debts, no matter how big or small, puts you in control of your finances and
provides a greater degree of freedom. Creating a budget can help you manage your debt repayments
by highlighting where you spend your money and where you can make possible savings to help you
pay off your debt faster.
5.6 Get some advice
Getting financial advice from a qualified professional can go a long way to helping you reach your
goals. Financial advisers can help you develop a budget, show you how to save, help you with
insurance and investments, and offer you advice on how best to reach your goals. It’s never too late or
too early to start saving. Every cent will count when you need it.
6. Tips to Control Spending
No matter how much debt you have, the key to avoiding more debt is to control your spending.While
there is no magic bullet to getting out of debt, keeping your spending in check greatly increases your
chances of living debt-free. It may be that debt is not an issue for you, but excessive spending is
keeping you from reaching your savings goals, whether it’s planning a holiday, buying a new car or
saving up a deposit for a home. The following tips can help you rein in your spending and take back
control of your finances.
6.1 Make a budget
Spending without knowing how much you are actually spending is a recipe for financial disaster.
Making a budget will help you focus on your priorities. You’ll also want to make sure you have an
emergency savings account, for things like emergency car and home repairs. This prevents you from
having to use a credit card to pay for unexpected expenses.
6.2 Be disciplined
Part of the budgeting process is establishing discipline in your spending.When you look at how much
you make each week and how much you need to live, you may find that you don’t have as much as
you thought for things like going to movies or restaurants. You may have to cut back on spending until
your debts are paid off. And remember you can reallocate money. Instead of spending $25 a week at
the dry cleaners, cut back to $10 a week and spend the leftover $15 on a movie or save it instead. This
is why budgeting is important; if you know where your money is going it’s easier to reallocate your
spending on things that are important to you.