4 simple tips to get your budget under control

If your budget is running rampant and out of control, you may find yourself going backwards. Keeping up with multiple repayments, covering ever-increasing living expenses, school fees, and car maintenance all adds up very quickly. If this sounds familiar, taking time to examine your budget can highlight where improvements can be made to maximize cashflow.

**1. Re-assess your budget**

Many people do not pay a great deal of attention to their spending habits, simply earning an income and buying what they need or want. Printing out bank and credit card statements for the last six months can reveal exactly where hard-earned income is going. It often highlights clear areas to cut back on short-term non-essentials, such as spa treatments, unused gym memberships, unwatched pay TV subscriptions, or forgotten gaming memberships. Individually they may not seem significant, but combined they make a notable difference.

**2. Understand your ongoing commitments**

Banks and lenders look at your current financial position as a whole. If finances appear disorganized with multiple debts, this can create issues when applying for a loan. Lenders evaluate total credit access, meaning a credit card with a $20,000 limit and a $0 balance is still viewed by a lender as a $20,000 commitment. Reducing unused credit limits and liabilities down to what is genuinely needed—such as a single card with a manageable balance—helps present a clearer financial picture.

**3. Saving for a deposit, holiday or other big purchase?**

Setting a budget and following it requires discipline, but evaluating purchases against long-term goals is key. Pausing to consider whether a new 70-inch TV, the latest smartphone, or takeaway food is necessary can keep savings goals on track. Long-term objectives are often far more valuable than impulsive purchases, especially when existing devices already meet daily requirements.

**4. Consolidating could be an option**

When managing multiple loan repayments becomes overwhelming, consolidating debt can streamline commitments and help restore monthly cashflow.

Merging multiple debts into a single structured repayment makes managing finances simpler. In some circumstances, equity in a property may be used to roll separate debts into a home loan.

While overall interest rates or fees might be lowered in certain scenarios, the primary benefit is often the simplicity of managing a single repayment. The key factor to consider is whether consolidation helps alleviate cashflow pressures.