What type of budgeter are you?

Budgeting has become very popular lately, as people grapple with inflation and try to make their dollars stretch further. If you’re setting up a spending and saving plan, it may help to work out what sort of budgeter you are first.

Are you the sort of person who has an Excel spreadsheet to track every purchase? Or does the idea of formalising a budget give you a headache? Either way, there are things you can do that may help to rein in spending, improve saving habits, and get you to your next big goal.

The first step is working out what type of budgeter you are. We’ve come up with a list of profiles, based on the behaviors we see from our members. What type are you?

Are you an active budgeter?

As the name suggests, an active budgeter likes to take control of their finances. They may:

• Have more than one bank account;
• Use the ‘bucket’ method of saving and spending, where money is allocated to different accounts for different purposes;
• Use apps or spreadsheets to track incoming and outgoing money;
• Choose to spread their accounts across banks or financial institutions mainly to avoid fees;
• Decide to come up with a formal plan before attacking discretionary spending.

Are you a half-hearted budgeter?

Half-hearted budgeters like the idea of a saving and spending plan, but don’t have as much time to commit to the process. They may:

• Loosely commit to the idea of a budget;
• Track bigger items – like a weekly grocery spend – but not worry about individual items;
• Have a rough idea of where money is going;

Do you like to live within your means?

People who like to live within their means tend to have a fairly good overview of where money is going. While they may have some forms of debt, they often try to avoid things like credit cards. They may:

• Know precisely what they earn, including overtime, shift loadings and bonuses;
• Be good at balancing their spending and saving;
• Put leftover money each pay cycle (if there is any) into a savings account;
• Be extra disciplined when it comes to cutting down on discretionary items, like unnecessary groceries, luxuries and other spending leaks.

Are you a budget rejector?

Formal budgets aren’t for everyone. In fact, some people outright dismiss them. However, that doesn’t mean people in this category can’t control their spending. Budget rejectors may:

• Think ‘bigger picture’ on long-term goals, rather than short-term spending;
• Feel like a budget is too much work;
• Not wish to compromise their lifestyle;
• Feel like they have nothing leftover to budget, because they spend all of their money on food and bills;
• Monitor spending, but not restrict it;

The bottom line

Regardless of the type of budgeter you are, there are apps available to help you on your money journey. If you want a bit of extra help, our wealth management arm Chelsea Wealth can point you in the right direction.

Get in touch today www.chelseawealth.com.au.