Whether you're a money pro or a total newbie, everyone needs to budget at some point in their lives.
Whether it's to buy a house, take a holiday or just get through day-to-day expenses, most of us need to save for something.
EnableMe managing director Hannah McQueen says while budgeting can be daunting, these simple tips can make a big difference.
She said most people blame their income for their budgeting struggles, but it's actually all about what you do with your money, not how much you make.
"For a lot of people, there is a knowledge ga or a strategy gap or a behaviour gap or a mindset gap when it comes to money.
"It's one of those things that means they aren't making progress, it doesn't tend to be an income gap," she said.
Hannah said budgeting is similar to dieting and when people aren't seeing progress they tend to become unmotivated, making it easy to get trapped in an endless loop.
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So where do you start?
The first thing you need to do is create a budget, she said.
To do that you need to work out how much money you make.
"Work out what you earn first, very few people know what their take-home pay is."
Then it's time to figure out your expenses. Those include things like rent, bills, food and transport.
Once you have that down, it's time to decide how much spare money you can have, that's up to you but it needs to be realistic.
Hannah said the next step is to factor in your savings and figure out a plan.
Now you have a budget, but how do you stick to it?
Prioritise saving
Between KiwiSaver, student loans and general savings it can be tricky to manage everything, which is why it's so important to prioritise.
Sometimes holding off on getting a KiwiSaver can actually be the right call, Hannah said.
"You have to have an emergency fund or some form of buffer and you probably should delay KiwiSaver until you get to that point."
However, she said if you haven't managed to save after two or three months, your behaviour may be to blame.
KiwiSaver can be helpful for people who struggle not to spend their savings, she said.
Set goals
Hannah said setting realistic financial goals helps people stay on track. However, setting wildly unrealistic goals will just hold you back.
She said it's fine to have dreams, but they shouldn't get in the way of the day-to-day stuff.
"The problem is that people make no progress. It's either there's not enough money coming in or they're a little bit shit with their money and those two things combined mean they stop trying. Then they don't believe they can get ahead and have a crisis."
She said it's all about prioritising and making sure you're working towards something.
Don't follow your parents' footsteps
The way your parents are with money has an impact on how you are, so make sure you aren't blindly following in their footsteps.
"In most instances, you just are your parents and the problem with that is that the situation is so much more challenging for young people than their parents," Hannah said.
She said a lot of young people think if they do what their parents did they will be fine, however, that's not the case.
"The problem is that normally the parents are a bit average as well, so there's this layer of hypocrisy with the whole thing but the difference between the parents and the kids is that the kids are starting adulthood in debt and the parents, in theory, own a property."
"I think glossing over an unsustainable situation is really dangerous from a financial perspective," she said.
Make yourself accountable
Making yourself accountable to a friend, parent, or loved one is the key to sticking to a budget, Hannah said.
"The key for a lot of people is to be accountable. Not to yourself, not to a freaking app, but someone."
Being accountable means telling someone about your savings plans and keeping them updated on your progress. This helps people stay focused she said.
Avoid credit card debt
This one may seem obvious, but it's very important, she said.
"If you're using a credit card or an overdraft it means that you're going backwards. If you have to use it then that's a sign that you probably shouldn't have it."
However, Hannah said credit cards can be used constructively to create a credit rating.
"So it might make sense to pay your mobile phone bill using the credit card every month and then you just pay off the credit card every month."
She said the danger comes when people start using their credit card to supplement a lifestyle they can't afford.
"The problem with debt is that it starts to spiral way too quickly and it becomes this snowball that you can't control and then it ends in tears, and the tears are that you're either stressed out or you're in crisis."
Manage emotional spending
Spending can be emotional and while everyone needs a treat every now and then, it's important that those treats don't derail your money goals.
"The problem is that it's an emotional topic [money] and you spend for emotional reasons, so it's just not helpful if someone says 'just don't spend' when if it was that simple you just wouldn't have spent in the first place."
She said smart people do dumb things when it comes to money and if people don't feel like they are making progress, they become unmotivated.
"When you feel like you should be getting ahead, but you aren't, that just gets depressing and then you want to spend to feel better."
Treat yourself
Yes, you heard that right. Treats are a vital part of sticking to a budget, according to Hannah.
"Everyone needs a treat. I think you need one or two treats a month usually. But let's say you need three, two of your choosing and the other one is when you make progress and you feel in control, and you're moving towards your goal, that is a treat because most people never get to feel that part."
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