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Proactive budgets could save ho...

Proactive budgets could save households financial misery

Economist David Rankin has claimed that Australians could save a great deal of money, if only they were more proactive.

These controversial claims from the founder of Sort My Money came amid a budgeting crisis for many households across the nation.

Primary expenses such as healthcare, energy and food have continued to rise at a rate that is twice that of inflation, leaving many feeling distinctly poorer than they did just ten years ago. This is according to data from the Australian Bureau of Statistics, which documents the rapid rise in the cost of living - something that has resulted in many experts calling for change in the financial system.

However, Mr Rankin has taken a different approach and said that households should be 'bulletproofing' their finances so they do not end up in a situation where they are struggling.

"Most people have a reactive financial lifestyle and react to increasing bills or salaries by panicking or spending more," he stated, before adding: "Get control of your spending and you will make your finances bulletproof."

Mr Rankin also claimed that for most people, spending is predictable, with key outgoings remaining the same every month. He added that it was leisure and entertainment activities that cannot be planned for and this is where most people's budgeting goes out of the window.

Some tips offered by the economist include drawing a weekly budget out of the cash machine and setting up important bills as direct debits so people cannot put off paying them.

Mr Rankin commented: "Nothing gets you distinguishing between needs and wants faster than handing over cash at the checkout."

However, not everybody has taken to the advice kindly. Speaking to the Australian publication news.au, consumer Lino De Palma defended his family's finances, stating that it was not always possible to predict outgoings and expenditure.

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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