Doing a budget (or money plan) lets you see the money coming in and going out of your household. It helps you to manage your money and save for things you need.
How a budget works
A 'budget' is a money plan that shows you the money coming in and going out of your household. This could be weekly, fortnightly or monthly.
Your money plan helps you work out what matters most. You can then choose to cut back on things you don't need and save more for things you do.
Do your budget
Follow these steps to get started.
To make it easier, get the simple money manager to do the adding up for you.
1. List money coming in
List the money coming into your household ('income'), such as:
- wages from your job
- pension or benefit payments from Centrelink
To find this information, look at your pay slips, online banking or bank statements.
2. List money going out
List money going out ('expenses'), like living costs, bills and debt payments:
- spending on weekly basics like food, groceries, transport
- regular bills like rent or mortgage, electricity, phone, credit repayments, insurance
- less frequent spending like clothing, school fees, car registration, medical expenses
Look at your online banking or statements, bills and credit card statements. Take note of what the expense is for, how much and when you pay it.
3. Compare money in and money out
Compare your list of money coming in and going out.
If you have more going out than coming in — it's time to make some choices. Think about what are:
- 'needs' (can't do without)
- 'wants' (could do without, at least for a while)
Decide what you can cut or reduce. Be realistic — don't make it too hard to stick to.
When you've made the cuts, subtract money going out from money coming in.
The amount left over is how much you can put towards your savings goal.
4. Set your savings goal
Setting a savings goal feels good and helps you stay focused.
It doesn't matter how big or small your goal is, just make a start. Putting aside even a small amount regularly adds up over time.
Make your budget work for you
Separate your spending and saving
Try setting up separate bank accounts for:
- everyday spending and bills
- savings
If you can, arrange a regular transfer of some of your pay to your savings account on pay day. This way, you’re saving without having to think about it.
Ask your employer, friend or family member if you need help to set this up.
Pay your bills in smaller amounts
Contact your service providers, like for electricity and gas, to ask about paying bills in smaller amounts ('instalments').
You may be able to pay fortnightly or monthly, to avoid the shock of a large bill.
If you get a Centrelink payment, you can use their free Centrepay service to do this.
Get help if you need it
There is free help available, if you need it:
- For help in your language, call the translating and interpreting service TIS National on 131 450. They will get an interpreter to call the service you need help with.
- For help to sort out money issues, call the free National Debt Helpline on 1800 007 007. The helpline is open Monday to Friday, 9:30am to 4:30pm.