A budget can help you work out what you’re spending money on and when
Are you aware that you need to change your spending habits, but you’re unsure where to start? A budget can help you get back to basics and work out what money is going where and when.
Whatever your plans, a budget can help you to:
- get more financially organised
- cut down spending in areas you have a tendency to overspend, like clothes shopping or eating out. This can significantly help you cut your debt
- save for a specific goal, like going overseas or buying your first property
Once you have set up your budget, it makes it easy to keep track of your spending, change your habits and reallocate your funds to achieve different goals.
How to build a basic budget
First, work out your income. Include your salary, plus any bonuses and investment income. Then, divide your money into seven main budgeting ‘buckets’:
- Living expenses—include rates, utilities, telephone, groceries, medicines, clothes, education, pets, child care and home maintenance.
- Transport—include petrol, vehicle registration, repairs, parking, public transport fares and taxi fares.
- Loans, credit card and store accounts—include home loans and personal loans.
- Taxes, fees and charges—include taxes on any investments and fees/duties.
- Insurance/superannuation—include life, health, super, home and contents, car, business and any other insurance.
- Leisure/entertainment—include holidays, eating out, takeaways, sporting memberships, newspapers, books, music and gifts.
- Savings—if you want to save money on a regular basis, for holidays, investments or a rainy day.
For each bucket, indicate how much and how often you need to pay—weekly, fortnightly, monthly or annually.
Managing and sticking to your budget
Then, once you’ve crunched the numbers, you can start looking at areas you can make savings.
You don’t have to do it all by hand. There are plenty of tools out there to help you manage your finances:
- A simple online tool like AMP’s Budget Planner Calculator can help you tally up your expenses and work out how much you have left over.
- There are even apps like MoneySmart’s TrackMySPEND that allow you to track your personal expenses on the go.
Need a hand?
Let us help you to use the power of budgeting to achieve your financial goals, start a conversation with us today.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
