Everywhere we look right now, we see info about how the cost of living is on the rise. Interest rate hikes are constantly in the headlines, rent is going up, food prices are increasing and let’s not forget good old petrol prices too. So, if you’re feeling a bit uneasy about your finances, you’re not alone. Many of us are being more cautious with our spending right now.

Understanding where your money is going can help you make ends meet, prepare for the unexpected or even help you put aside extra funds for a rainy day. Our favourite way to do this is to track your spending and put a realistic budget together.

If you’re looking to apply for a loan or already have a current loan with us, keeping track of your spending can also help you keep on top of your repayments too.


Why You Should Keep Track of Your Spending

Tracking your expenses can help you keep your spending in line with your income and avoid a budget blowout or unnecessary debt. How are you supposed to keep on top of price rises if you don’t know where your money is going? It’s also a good idea to set up a weekly or monthly budget that goes hand in hand with this – but more about this later.


But how can this help you with your loan application or repayments?

If you find you need some financial assistance for an upcoming expense or to cover some unexpected costs, we may be able to help.

During the loan application process, all lenders providing consumer credit in New Zealand need to ensure they have a clear understanding of a borrower’s requirements and objectives. They must also assess a borrower’s income and expenses to ensure that the repayments required of any loan are not likely to cause substantial hardship to the borrower.

To do this, many lenders, such as Instant Finance, will require applicants to complete a budget of their finances and will need the last 3 months of bank statements. As responsible lenders, this check means that we won’t let you get in over your head with your repayments.

Tracking your spending and being on top of your expenses give you a better chance of having your loan approved

If you already have a loan with us, tracking your spending and having an accurate monthly budget can help you factor in all costs so that you’re able to meet your repayment requirements. As costs increase, it's a good idea to update your budget to make sure it’s realistic. Remember, if you’re finding it difficult to meet your agreed repayments, contact our friendly team and they’ll be glad to assist you.


How do you keep track of your spending?

So, we’ve talked about why you should keep track of your spending, but what about how?

There are lots of apps and tools out there that can help you keep track of your spending, but you can also do it with a trusty pen & paper. Here’s how we’d tackle it...

Make a list of all the categories of your spending each month; these might be:

  • Regular bills (rent, utilities, insurance)
  • Groceries
  • Takeaways/eating out
  • Clothes & footwear
  • Petrol and Transport
  • Loan repayments
  • Childcare & Education
  • Entertainment

Each week or month, go through your bank statement or receipts and categorise each purchase. Total up each category of spending.

Once you have the total for each category, you can review your spending and see where you’re doing well and where you could cut back on or reallocate your money.


Why should you make a budget?

Budgeting, like tracking your expenses, can be done on paper, in a spreadsheet, on online accounts or in an app – our friends over at Sorted have some excellent templates too.

Here’s why budget setting is great to go hand-in-hand with tracking your expenses.

Try to spend less than what you earn – When you have a budget, it’s much easier to live within your means. Without one, you might not fully understand whether you're overspending, how much you’re overspending by, and what it’s costing you.

Work to reduce debt – A budget can help you see your essential and non-essential expenses. This can help you identify areas where you can cut back your spending and allocate that money to reduce your debt.

Set aside money for other goals – If you can, you can use budgeting to help you save money for a holiday, some new wheels or even a rainy-day fund. 

If you’ve completed your monthly budget and find you need some extra funds along the way, we’re always here to help! A personal loan can give you the helping hand you need. As a responsible lender, we will always make sure you can afford your loan repayments and can even help you create a budget to work out how much you can borrow and afford to pay back. Chat with our friendly team today about your financial situation and how we can help.

We know tracking your expenses or budgeting isn’t as enjoyable as watching Netflix or playing with your kids, but it’s an important task that can help you get a step ahead and put good spending habits in place, especially at this uncertain time!


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