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.
1. Record your income
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:
- how much
- where from
- how often (weekly, fortnightly, monthly or yearly)
This money could be from your wages, pension, government benefit or payment, or income from investments.
2. Add up your expenses
Regular expenses are your 'needs' - the essential items you need to pay for to live. These include:
Fixed expenses, for example:
- rent or mortgage payments
- electricity, gas and phone bills
- council rates
- household expenses, like food and groceries
- medical costs and insurance
- transport costs, like car registration or public transport
- family costs, like baby products, child care, school fees and sporting activities
Debt expenses, for example:
- personal loan repayments
- credit card payments
- mortgage repayments
Unexpected expenses, for example:
- car repairs and services
- medical bills
- extra school costs
- pet costs
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.
If you tracked your spending, use your list of transactions.
3. Set your spending limit
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.
4. Set your savings goal
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.
5. Adjust your budget
Your budget needs to work for you and your lifestyle so it'simportant 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.
6. Make budgeting easier
To help make budgeting easier, consider having separate bank accounts. You could have:
- a transaction account for bills and expenses
- a transaction account for spending
- a higher interest savings account
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.
FAQs
The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
What is the best way to budget in Australia? ›
There are many simple ways to budget, but one of the most popular is the 50-30-20 rule. This rule involves allocating 50% of your income towards essentials, such as bills, 30% of your income to non-essential expenses, such as entertainment, with the remaining 20% spent on debt repayment or saved.
Is there a free budget template? ›
Google Sheets' native free monthly budget template is a user-friendly income and expense tracker.
How to be moneysmart? ›
Simple ways to save money
- Separate and automate your savings.
- Look for ways to reduce spending.
- Have a savings plan.
- Set a savings goal.
- Pay off some debt.
- Up next in Saving.
What Is Grant Cardone's 40/40/20 Rule? Cardone's 40/40/20 rule is part of his overall wealth creation formula, which says that you should earn as much income as possible and save as much of that income as possible until you can afford to invest in income-producing assets.
What is the 40-40-20 rule? ›
The dictum is that 40 percent of your direct marketing success is dependent on your audience, another 40 percent is dependent on your offer, and the last 20 percent is reserved for everything else, including how the material is presented. The following is a brief breakdown of the 40/40/20 rule of direct-mail marketing.
Is it cheaper to live in Australia or us? ›
What is the average cost of living in Australia vs the US? It costs an average of 800 Australian dollars (512 US dollars) per month to live in Australia, compared with $525 in the United States. What is the transportation cost in Australia? The average transportation cost in Australia is around A$150 (USD 96).
How much money do I need to go to Australia for 2 weeks? ›
The average tourist will spend $2,200 for a two-week stay. Of course, the cost to visit Australia ranges such that a budget traveler can spend as low as $900, while a luxury traveler can spend as much as $6,500.
How much money do you need for 2 months in Australia? ›
So the two months in Australia, having summed up an estimated cost of food, drink, transport and activities with accommodation using a 3 person campervan hire can cost you around $5586 (excluding any discounts) – per person that is only $1,862, in comparison to staying in a backpacker hostel and using public transport ...
Is there a completely free budget app? ›
Honeydue: Best for couples
Honeydue is an app built specifically for couples who need help managing their household bills, balances, and spending. It's completely free, although you can choose to tip the developers to help support new features.
How to create a budget spreadsheet
- Choose a spreadsheet program or template.
- Create categories for income and expense items.
- Set your budget period (weekly, monthly, etc.).
- Enter your numbers and use simple formulas to streamline calculations.
- Consider visual aids and other features.
How to make a monthly budget: 5 steps
- Calculate your monthly income. The first step is to determine how much money you earn each month. ...
- Track your spending for a month or two. ...
- Think about your financial priorities. ...
- Design your budget. ...
- Track your spending and refine your budget as needed.
- Set Life Goals.
- Make a Monthly Budget.
- Pay off Credit Cards in Full.
- Create Automatic Savings.
- Start Investing Now.
- Watch Your Credit Score.
- Negotiate for Goods and Services.
- Get Educated on Financial Issues.
The headquarters for MoneySmart Group are in Singapore.
Is Money Smart a legit website? ›
ASIC's role in consumer education
Moneysmart is a Federal Government website, brought to you by the Australian Securities and Investments Commission (ASIC), the corporate, markets, financial services and consumer credit regulator in Australia.
What is the disadvantage of the 50 30 20 rule? ›
Cons. Percentage guidelines don't work for everyone: For some people, the 50/30/20 budget just isn't realistic — especially with today's rising cost of living. If, for example, debt alone takes up 20% of your budget and your needs far exceed 50%, you may need to take a different approach.
How do you distribute your money when using the 50 20 30 rule? ›
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
When might the 50 30 20 rule not work? ›
It disregards people with irregular income.
The 50/30/20 rule also doesn't account for people with variable income, like freelancers or the self-employed, who may struggle to stick to it every month.
What is the 50 30 20 rule for car payments? ›
Balance Your Budget
50% for needs like housing, food, and transportation. In this case, the monthly car payment and other related auto expenses fit into this category. 30% for wants like entertainment, travel, and other nonessential items. 20% for savings, paying off credit cards, and meeting long-term financial goals.
