Investing: Budgeting to save extra $93 a week could make you $2.3 million read full article at

With the spiralling cost of living, inflation pressure and rising interest rates, many Aussies are struggling to keep up.

But if you want to get ahead with your money, you need to do more than just make ends meet – you need to find a way to save and keep your financial momentum building.

It’s not easy, but finding a way to make this happen is worth it.

In Australia, the average pre-tax income is $92,029 or $1342 per week after tax, and the average savings rate is 6.9 per cent, reflecting average weekly savings of $93.

If you could manage to double your savings rate and save an extra $93 per week and then invest that money into the share market, it would grow over the next 10 years to be worth $81,614.

Keep this going, and over 20, 30, and 40 years this extra savings would grow to be worth $298,206, $873,013, or $2,398,479.

If you want to achieve savings success, there’s one key area you need to get right, and that’s budgeting. Nailing it in this area will go a long way to driving your savings success, and delivering the financial results you want while you live a lifestyle you love.

What a budget isn’t

Having a good budget does not mean you have to count every single dollar you earn. It doesn’t mean that you can’t have a good lifestyle. And it doesn’t mean you need to spend less on anything that’s actually important to you.

Good budgeting is simply about good prioritisation. Everyone has priorities, whether is be day to day spending (and lifestyle), travel, where you live, how much you save and invest, which conveniences you want to have in your life – the list goes on.

Everyone’s priorities are different. For some people travel is something that’s very important, and for others it’s less important. For some, it’s living in a nice house or in an expensive area or suburb. For others, it’s eating out.

Budgeting success just means that you’ve prioritised the things that are the most important for you and you’re saving at a rate you’re happy with.

To get there, it often requires you to de-prioritise the things that are less important.

You are in control of your spending and saving

If you’re like most people, when you include all of your ideal spending over the next 12 months, you’re probably not saving as much as you want to be. You might even be in the red – I know that was the case for me the first time I went through this process.

This step is all about prioritising to get you to a point where you’re happy with how much you’re spending and how much money you have available to save and invest.

Some changes are easy to make, and others will require more work, planning and time to make happen – but they all can be changed if that change is important to you and your money success.

Bear in mind there may be elements that are ‘fixed’ in the short term. Things like rent and bills, your income, or debt you’re now determined to ditch for good. These commitments need to be met, and it may mean some short-term discomfort (or even pain). But over time you can shift and change all of these things to create a spending and savings plan that delivers the lifestyle you want and the savings results you want.

Short term/immediate prioritisation

It’s easy for expenses to creep into our lives that don’t bring much real happiness, satisfaction, or value. This happens because we often make our spending choices in the moment, and in the moment our inner spender wants that pleasure hit that comes from spending.

You’re always prioritising, and prioritising in the moment almost always leads you to choose priorities that aren’t 100 per cent consistent with what’s important to you.

The alternative: Conscious prioritisation

You know you only have so much money to work with (at least for now). You know you want and need to save enough money to make the progress you want. And you know that spending outside your means will just result in you having to make sacrifices in other areas.

Longer term prioritisation

Warning: There’s some serious potential and value in looking at how you can change your expenses and increase your income over time, but you should avoid relying on non-immediate changes to your income (or spending) to drive your savings success.

You should avoid ending up in a situation where you’re not saving much or at all, but you have grand plans to change careers or move interstate to increase your savings capacity. It’s easy for life to get in the way of these changes, and if you’re deferring saving success until bigger changes are made, you risk them taking longer than expected, and all the while you’re financially ‘treading water’.

Instead, create a savings plan where you’re happy with how much you’re saving tomorrow. Then if you change things over time that further increase your savings capacity, this will be the cream on top.

How to prioritise

So now it’s time to assess.

First, you’ll want to run through your expenses and look at each of them in turn, thinking through how important they are to you. While you’re doing this, keep in mind that every dollar of expenses you eliminate is another dollar you’ll have to save.

Everyone’s priorities are different, so there’s no one ‘right way’ or ‘right amount’ for you to save. The key is making sure you’re getting real happiness and value out of your spending.

As you’re prioritising, your savings number will be constantly changing.

Each time you make changes to your spending allocations, circle back to your savings number and see how it’s tracking.

Getting to a position where you’re happy with your spending and how much you’re saving often takes a few rounds of prioritisation, so don’t sweat it if you’re not immediately exactly where you want to be.

This just means you need to rinse and repeat. Doing this well can take a little time but given your spending plan is going to dictate your everyday lifestyle, and your savings plan will dictate your rate or money progress, the juice is worth the squeeze here.

The wrap

How much you spend and save is one of the biggest drivers of how quickly you get ahead with your money. It’s also the main driver of how you feel about your money, your levels of financial confidence and peace of mind.

It’s not easy, but taking a good approach to prioritising is half the battle – success here will go a long way to getting you the results you want from your money.

Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth, the host of the How to be Successful with Money podcast, and author of the Amazon best-selling book ‘Get Unstuck

Ben runs regular free online money education events to help you make better money choices and get ahead faster. You can check out all the details and book your place here

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.

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