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BUDGETING IN A CHANGING ECONOMY


With the rising cost of living and increasing interest rates many households are feeling the pinch and being more conscious of their spending.


For many households this conscious spending hasn’t been a problem for a decade now, so understandably, we are out of training in how to deal with it or talk about it as a family.


You could quite easily fall into a negative mindset, or you could take a positive approach and get better control of your spending via what we call a ‘spending and savings plan’.


A spending and savings plan makes provision firstly for things you need to live, often called fixed costs. Then it’s followed by adding in discretionary spending items to see if they are feasible. This then allows you to prioritise these discretionary expenses as a family.


One of the key elements to a spending and savings plan is the structure and automatic flow of money which makes it easy to follow each week.


As expenses change over time (e.g. rates increasing), you simply review the spending and savings plan, make adjustments to discretionary items if required to account for the increased cost of living, then alter your automatic flow of money between bank accounts.


If you’ve never followed any sort of budget or spending plan, 2023 might be a great opportunity to start creating better habits and structure in how you manage your money.


The flow-on effect of this is that you can be more focused on assessing feasibility of your personal and family goals.


If you’d like to discuss the steps to building a tailored spending and savings plan, don’t hesitate to give Hub Advisory Group a call on 4926 8000.

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