
Everyday Budgeting
What are the benefits of a budget?
Take control of your money and spend it on you: Creating a budget gives you an overview of where your money is disappearing to! Once you know this, you can take control and decide that maybe all that money you’re spending on takeaway pizza could be better used on a holiday later in the year or a new phone. Whatever your interests, creating a budget helps you invest more in them and better enjoy them.
Make priorities and stay out of debt:
Debt can be crippling and should be avoided at all costs. Ever had to dig into your savings in order to pay that phone bill or barely scraped past paying rent? Making a budget lets you decide what you should prioritise and ensure that you stay out of debt, be that to your parents, mates or to The Man (or the bank as it is more commonly referred).
Make priorities and stay out of debt:
Debt can be crippling and should be avoided at all costs. Ever had to dig into your savings in order to pay that phone bill or barely scraped past paying rent? Making a budget lets you decide what you should prioritise and ensure that you stay out of debt, be that to your parents, mates or to The Man (or the bank as it is more commonly referred).
Preparing your budget
There are a few steps you need to follow to prepare your budget. Take a seat and grab a frosty beverage before doing this (but not too many beverages, then things will get a lot more difficult), because this may take a little time. But trust us, it’s totally worth it in the end!
1. Set a time period
The first step is to decide what time period you will budget for – whether this be week to week, per fortnight or monthly. It’s usually a good idea to make this coincide with how often you are paid. If you’re paid once a fortnight, think about budgeting fortnightly to make things easier.
2. Find out what you spend money on
Do do this, you’ll need to go through all of your expenditure in order to find out where your money goes. Yes, that means going through your bank statements, bills, credit card statements, receipts, shopping dockets and anything else you can think of.
3. Find out what you WANT (or need) to spend your money on
In this step, your aim is to decide what you want to save up for. This could be that car you’ve got your eye on, a holiday with friends, an existing debt you need to pay off, or simply just saving for the sake of it. You’re gonna need them one day!
4. What’s your income like?
This step is pretty straightforward. Add up your pay, any Centrelink benefits and any other forms of income you can think of.
5. Make priorities!
This is the tough part. Take your pay and minus what you’re saving up for. For example, if you are saving up for a $600 holiday in 6 months, you’ll need to set aside $100 a month, $50 a fortnight, or $25 a week. Do this for all major recurring bills as well (think phone bills, rent, utilities and subscriptions).
With the remaining amount of pay you have left, decide what you can live without and what you cannot. Maybe you’d be better off cancelling that Netflix subscription so that you can use that cash on other expenses. You need to be ruthless here, but you also need to be realistic. There’s no point telling yourself that you won’t buy that kebab after a night out when we all know you absolutely, definitely will. And that’s okay, we won't judge so long as you’ve budgeted for it.
6. Open a savings account
Open a savings account, preferably with high interest to maximise your returns. This is where you will transfer money for things that you are saving for. Even better, transfer any money left over at the end of the month, fortnight or week so that you have an emergency fund when you need it.
Note: make sure you understand the fees and rules of your savings account. No point opening an account to save money if it is going to cost you to keep it open or to take funds out when you need it most!
1. Set a time period
The first step is to decide what time period you will budget for – whether this be week to week, per fortnight or monthly. It’s usually a good idea to make this coincide with how often you are paid. If you’re paid once a fortnight, think about budgeting fortnightly to make things easier.
2. Find out what you spend money on
Do do this, you’ll need to go through all of your expenditure in order to find out where your money goes. Yes, that means going through your bank statements, bills, credit card statements, receipts, shopping dockets and anything else you can think of.
3. Find out what you WANT (or need) to spend your money on
In this step, your aim is to decide what you want to save up for. This could be that car you’ve got your eye on, a holiday with friends, an existing debt you need to pay off, or simply just saving for the sake of it. You’re gonna need them one day!
4. What’s your income like?
This step is pretty straightforward. Add up your pay, any Centrelink benefits and any other forms of income you can think of.
5. Make priorities!
This is the tough part. Take your pay and minus what you’re saving up for. For example, if you are saving up for a $600 holiday in 6 months, you’ll need to set aside $100 a month, $50 a fortnight, or $25 a week. Do this for all major recurring bills as well (think phone bills, rent, utilities and subscriptions).
With the remaining amount of pay you have left, decide what you can live without and what you cannot. Maybe you’d be better off cancelling that Netflix subscription so that you can use that cash on other expenses. You need to be ruthless here, but you also need to be realistic. There’s no point telling yourself that you won’t buy that kebab after a night out when we all know you absolutely, definitely will. And that’s okay, we won't judge so long as you’ve budgeted for it.
6. Open a savings account
Open a savings account, preferably with high interest to maximise your returns. This is where you will transfer money for things that you are saving for. Even better, transfer any money left over at the end of the month, fortnight or week so that you have an emergency fund when you need it.
Note: make sure you understand the fees and rules of your savings account. No point opening an account to save money if it is going to cost you to keep it open or to take funds out when you need it most!
7. Stick to it!
As soon as your pay arrives in your bank account, pay all bills that you have outstanding and transfer funds for what you are saving for across to your savings account.
Ensure that you're on track with your budget by reviewing your bank accounts frequently or downloading a budgeting app, such as TrackMySpend or Toshi. Apps like this will help you to keep tabs on how much you're spending so you can stay on track!
If there's any leftover money, chuck it into your savings account!
I’m in debt, help!
This is where it gets tough. There is no silver bullet to overcome debt and every situation is different.
One tactic is to be more critical of your spending – go over your bank statements again and cut down on everything possible. You may have to change your lifestyle slightly in order to live within your pay packet. This means thinking critically about every purchase you’re going to make. It’s not going to be fun, but it’s worth it to get out of debt and strengthen that financial willpower.
Lastly, you may have to dig into your precious savings account. If you go down this route, ensure that you budget in a way to replenish what you took out in the future.
This information is intended to be general in nature only and might not apply to your personal circumstances. When in doubt always seek professional guidance.
One tactic is to be more critical of your spending – go over your bank statements again and cut down on everything possible. You may have to change your lifestyle slightly in order to live within your pay packet. This means thinking critically about every purchase you’re going to make. It’s not going to be fun, but it’s worth it to get out of debt and strengthen that financial willpower.
Lastly, you may have to dig into your precious savings account. If you go down this route, ensure that you budget in a way to replenish what you took out in the future.
This information is intended to be general in nature only and might not apply to your personal circumstances. When in doubt always seek professional guidance.
