The basic rule you need to keep your spending in check is one of the oldest - and it still applies

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If planning is not your style, sticking to this basic rule is the best way to go.

Allocate 50 per cent of your income to essential costs such as rent or mortgage, bills and food. Then, allow 30 per cent for discretionary spending and personal expenses.

With the final 20 per cent, use this wisely by putting it into savings, paying off existing debt or investing.

That 20 per cent is usually where the temptation to spend rather than save arises. If you think you cannot resist the urge, consider keeping that 20 per cent in a separate account, out of sight and out of mind.

1. Build and maintain a practical monthly budget that will put you on track to achieve your financial goals

And stick to it! Creating a written plan will help you allocate your hard-earned funds to the right things, and spare you the guilt associated with unnecessary spending. Treat your budget as a financial calendar where you can note your independent variables such as birthdays, bills, and school fees, so you can foresee large expenses and avoid the last-minute scramble.

Plus, it’s not all bad… Having a monthly budget allows you to have accurate visibility on how much you can afford to treat yourself. That way, you know how much you can spend on yourself without the constant worry of having a defunct bank account plaguing you. If you need a tool to get you started try ASIC’s quick and easy online budget planner.

2. Get your bills under control

Bills are the bane of our financial existence. For some, bill paying is a robotic process, resulting in passiveness towards those extra hidden costs, or those additional megabytes of internet data that were charged out of nowhere. The attitude can be ‘whatever, let’s just pay it off and be done with it.’

If this sounds like you, it’s time to call your service provider and attempt to re-negotiate better deals. Taking control of your bills can immediately accelerate your savings and get you to the finish line quicker. Do some research on the different providers in the market, often quoting competing rates to your current providers can earn you a significant discount.

For the serial late bill payer, your first resolution should be to set up reminders, alerts or even blaring alarms to remind you to pay your bills on time and avoid those wasteful late fees.

3. Stay on top of your finances by holding onto your receipts and keeping a record of all your purchases

Far from hoarding, holding on to receipts will give you a reality check on how much you actually spend on non-essential items or services. The diligence will be worth your while when it comes to preparing for next year’s tax returns and getting more bang for your buck!

4. Get organised and know what your direct debits are

Set-and-forget payments are convenient, but we are prone to forget what we are paying for, and where that money is coming from. Get organised and consolidate recurring payments like bills, Netflix and gym memberships which may be spread across numerous credit cards, to be paid through your PayPal account. That way, you can see all your transactions in one place, and when your credit card expires, you only have to update it once. Using PayPal also adds a layer of security to protect your information and money from scammers.

Extra tip for safety.

If you are struggling – ask for help. The ASIC website has a list of financial counsellors who can provide free and confidential advice for anyone dealing with financial issues. You can also call the National Debt Helpline for free on 1800 007 007.

Brian McDonnell is the director of mid-market and small business at PayPal Australia.

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