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Five tips for accurate budgeting

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My fiancé and I have started budgeting for the first time and have noticed it really makes a difference in terms of ensuring we can save money for a home deposit. A deposit is building up rather nicely. Do you have any tips to ensure that we are budgeting properly?

Yes. The Australian Securities and Investments Commission (ASIC) have provided a number of ‘tips for more accurate results’ in your budgeting:

  • Leave out any irregular income that you would not usually receive. For example, overtime that is not regular or bonuses for unusually good performance should not be included within the budget.
  • Calculate all income and expenses consistently for the period you have chosen, for example per week, per fortnight or per month. If you need help with this, the ‘budget planner’ includes a converter to turn annual and quarterly payments into weekly, fortnightly and monthly amounts.
  • Check your pay slip for any deductions (except tax) already made, for example superannuation, health insurance or a company car.
  • If you receive any income that has not been taxed, deduct your estimate of tax due before entering that amount as part of your income. Dividends from company shares may include 'imputation credits', or tax already paid at the company tax rate as set out on your dividend statement.
  • When you estimate tax due on dividends, remember to deduct any imputation credits. Imputation credits reduce your tax bill.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Tuesday, February 22, 2011

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