The best way to take control of your finances is to do a budget. This is a simple tool that helps you understand the money going in and out of your household. A budget shows you if you are spending more or less than you can afford. It enables you to direct your money to where it matters most, so you can stay on top of bills, pay off a credit card or loan, and save up for a holiday or big purchase.
A budget may also help you get off the treadmill of living from one pay packet or payment to the next. It enables you to sort out your money priorities and find the right balance between spending and saving.
Completing your budget
Download the budget planner to plan where you want your money to go. Choose a time period for your budget that suits your lifestyle - for example, a week, a fortnight or a month. It is helpful to look at the money going in and out across a whole year. Include regular payments such as your rent or home loan, phone and electricity, car or public transport. Your bank statements, bills, credit card statements, receipts and shopping dockets will help you to work out all your expenses. Use your best guess if there's anything you can't find or if bill amounts vary across the year.
Add in all the money that you receive or are paid over the time period. This could include your pay from your job, any casual work, from your business, government benefits and any money from investments. If your income is variable, make an estimate based on your past year's earnings.
When working out your money priorities, think about which items you need for your basic living expenses and which are extras or things you could maybe do without if you needed to save some money.
Using your budget
Print your completed budget planner and keep it somewhere safe. Before you go to the supermarket or other shops, check your budget to see how much you can spend and then stick to that amount.
It's a good idea to redo your budget every 3 to 6 months to make sure it reflects your current income, spending and what you want to achieve. Once you are comfortable with using and sticking to a budget, you can update it less frequently, like once a year.
You will probably also want to refresh your budget when there are significant changes to your income or expenses, like getting or losing a job, buying or selling a car or house, the extra cost of expanding your family.
If you have any questions or would like to further explore this activity, please contact us .