Accountant Riann Umaga-Marshall provides three empowering tips for mastering the arts of household budgeting and saving.

According to a University of Washington study, genetics play a huge part in our attitudes to money: we’re either natural spenders or natural savers. Therefore, budgeting does not come easily to the spender. But the good news is that our natural inclinations can be overcome if we create the budget in such a way that empowers us and gives us the control.

It’s important for spenders to remember that having a budget does not mean, “I can’t.” What it really means is, “I can, but I have to plan for it.”

Yes, you can still go on that two-week holiday in Bali. You can still go out for a fancy dinner with your friends. Just know when those events are going to happen and plan for them in your budget. Or, if you want a bit of room for spontaneity, allow yourself ‘quotas’ and factor them in (e.g. one fancy dinner a month).

By having a budget, you can set aside a bit of extra money each month for more extravagant purchases, while still reaching your savings targets. And this control over your money, and corresponding freedom to spend, can be incredibly empowering.

So, here are three steps for creating an empowering budget:

Step 1: Create accountability

Whether it’s with your business or your partner, say, “Okay, we’re going to spend $X each month.” If you’re single, find someone in your life who is good with money—your sister, a friend, or an accountant.

Now here’s the scary part: hand over your bank statements for the past three months. Get your trusted person to look through and be completely honest with you. Did you really need to spend that much on groceries? How many times do you really need to eat out? Sometimes, all it takes is a bit of outside perspective!

Step 2: Set the budget

In a budget, there are important things and then there are less important things. First, write down what you need to spend each month: rent or mortgage repayments, utilities, food, transportation, etc. Then give yourself a bit extra for the things you love doing that cost money. Allow yourself a movie night once every couple of weeks, a dinner out, $200 per month set aside for that trip to Bali next year. Whatever it is, plan for it now.

The difference between your budgeted expenses and your budgeted income is the amount you are going to save. Write this figure down in your diary. Stick it on the fridge. Whatever you do, don’t forget that golden figure.

Step 3: Implement the budget

The actual action of putting away savings isn’t that hard: you get paid and then you put the “golden figure” into your savings account. You did it! You’ve achieved your goal. But the hard part is yet to come.

Now, you’ve actually got to follow your budget for the rest of the month. The reality is, the first month is probably going to be a complete disaster. You might get to the final week and have $10 left for seven days. That’ll feel like a throwback to uni days for some.

The second month will be a bit easier, but still difficult. By the third month, you should have ironed things out. By this time, you will have tweaked your grocery lists so you’re not going over budget. You’re being more conscious around your small transaction decisions. For example, you realised you can’t have that $4 coffee every morning before work so you’re getting up five minutes earlier to brew a pot of plunger coffee.

Need help setting your budget? Or want an extra pair of eyes to look over your statements? We can help you with your financial planning, whether it’s personal or for your business.

Riann Umagag-Marshall is a managing accountant at IIF Accountants