i am interested to know what people here think is a reasonable budget. i imagine most here would have a formal type of budget in place to be achieving property investment or saving.
my partner and i have a budget for expenditure of $622 per week. That includes budgeting for all house expenses except mortgage, vehicle running costs and all otehr expenses (but not holidays)
i’m wondering what others think is reasonable and what budgets tehy are working to. ours is generous in terms of food and entertainment and if we wanted to tighten the belt this is the area we would do it in. everything else is pertty much a cost of living – water, electricity etc.
we would like to purchase another property next year and think that the budget we’ve got allows us reasonable savings for proeprty investment.
A reasonable budget – how long is a peice of string.
This is a very subjective topic – there is so much to consider – income, kids, home exps, entertainment etc.
As they say – you should pay yourself first and budget around that.
how can you pay yourself first without knowing what it costs to live.
i have friends who are deluded in terms of what it costs to live and they think they are saving heaps of money but in fact then the car registration and insurance come in and $1500 goes out the door right there. because they haven’t budgeted all year for these costs their bank account dwindles fast.
even with kids and co i think a budget is very important. it enables me to reach certain goals. without it i wouldn’t be able to make confident decisions.
Hi Nats,
A number of financial gurus advocate a ‘pay yourself first’ approach so that you do get into the habit of looking after your future. The coonsensus seems to be that the earlier you start the habit of paying yourself first the easier it becomes to maintain the habit – this leading to greater discipline and a better asset base behind you.
Often what happens is that many people will spend up to their budget limit, irrespective of their income, without actually putting something to oneside for their future.
Without doubt a budget is an effective tool in the grand scheme of things however the figures will be relative to a whole range of specific individualised factors. The key issue is your budget needs to be affordable and within the constraints of your income.
Just as an aside we do an annual budget and know where our $ are going. This process certainly enables us to spend within our means and put something aside for the future.
Derek
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O dear, [blink] I have to admit I am not at all good at budgeting.
Or may be I am, may be I would be the bestest budgeter among the budgeters, but I’ll never find out because really, I have never tried budgeting.
Tooooo lazy! I can’t be bothered.What’s worse, I don’t really care![whistle]
Is that bad?[blush2][evil4]I just spend what I think can be spend and needs to be spend, but no I am not a systematic planner.
So I spend, and what’s left over goes into our LOC to reduce interest!!!
Celivia
NATS,
I take a different approach. I work out what I need for the IP. So say I need 20% as a deposit, or 30% for the next IP, I work out what that amount will be (by knowing what value property I want), and then look at my LVR and equity I have. So say I need 5k for the next property to keep my LVR at 80%… then I know I have to find 5k. If I get a decent tax return, I don’t need to save a buck throughout the year, so I spend everything- hehe
I never budget- but I do know exactly what amounts of money I need for the next property. It’s just a reverse way of working things out.
kay henry
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