Having a budget helps you see where your money is going. You can put aside money for bills and expenses and set up a plan to reach your financial goals.
Follow these steps to get started. Use how often you get paid as the timeframe for your budget. For example, if you get paid weekly, set up a weekly budget.
Record how much money is coming in and when. If you don’t have a regular income, work out an average amount.
Make a list of all the money coming in, including:
This money could be from your wages, pension, government benefit or payment, or income from investments.
Regular expenses are your ‘needs’ – the essential items you need to pay for to live. These include:
Fixed expenses, for example:
Debt expenses, for example:
Unexpected expenses, for example:
To make sure you’ve recorded all your expenses, look at your bills or bank statements. Include what the expense is for, how much and when you pay it.
The money you have left after expenses is your spending and saving money.
Your spending money is for ‘wants’, such as entertainment, eating out and hobbies.
Make a plan for what you want to do with your spending money. This will help you to see where it goes and keep within your spending limit.
If you have a savings goal you can use your budget to work towards it.
Once you know how much money you have for ‘wants’, you can work out how much of it you’d like to save.
Having some savings can create a safety net for unexpected expenses. Even a small amount set aside regularly will make a difference.
Your budget needs to work for you and your lifestyle so it’s important to adjust your budget as things change.
For example, if your expenses start to increase you may need to reduce your spending, or change your savings goal. Or you might be able to save more if you get a pay rise or you pay off some debt.
Set up an Excel budget spreadsheet.
To help make budgeting easier, consider having separate bank accounts. You could have:
You can then automate your budget by setting up a regular transfer to your savings account on pay day. You can also set up direct debits when your bills are due.
Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/budgeting/how-to-do-a-budget
Important note: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.
Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.