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When creating a budget it is important to keep in mind that money is only being spent on the things that you really need. This isn’t to say that you should only live on bread and water. However, conscious spending is the key to an effective budget.

Start by thinking about why you are budgeting – saving for a home deposit, a holiday or some emergency money. These goals should keep you on track and make sure you stick to the budget.

Here are some simple steps you can follow when you decide to create your own budget:


What comes in vs what goes out?

When adding up all your income make sure to remember everything that you may receive on top of your salary. This may include any Centrelink payments, interest on your savings, proceeds from a side gig, as well as rent from an investment property.

Monthly or quarterly reconciliations of your bank statements and credit card bills will help you keep track of where your money is going. With a categorised record of your expenditures, you’ll be in control of where you spend.

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Trimming the fat

When you finally take a step back and look at exactly what amount of money is being spent where, it can be a real eye opener. You may find yourself asking questions like:

  • "How much do I spend on sandwiches and takeaways?”
  • “Did I really need to buy that gadget? I’m never going to use it anyway.”
  • “Can I get away with moving to a cheaper phone plan?”

This will reveal plenty of easy ways to cut back and save you some money. Here are some useful tips that you might want to try:

  • Spread the cost of buying Christmas presents over the year – start saving now with a Christmas Club account
  • Reclaim your pantry – plan some easy and inexpensive meals using things you already have.
  • Cut down buying lunch at work – do a big cook-up one weekend each month and freeze portion-size meals for delicious, healthy school and work lunches.
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What's my position?

After you’ve had a good hard look at where you are spending and where you are saving, have a look at where you stand now.

  • Do you spend more than you earn?
  • Do you transfer what's left at the end of the month to your savings or do you just spend your whole pay?
  • Do you have an emergency fund and if so, how long would it last you?

Then divide all costs into four different columns

  • Must-haves – such as rent and groceries.
  • Nice-to-haves – movie nights, drinks with friends, takeaways.
  • Once-in-a-while indulgences – massages, beauty treatments and going to concerts and sports events.
  • Goals – savings for emergencies, a new car, starting a family or your retirement.

Are you meeting your goals at the moment? If you keep up your savings plan, how long will it take until you have saved enough?

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Fresh start

Finally, you are now ready to draw up your plan of attack. Make sure you’re still living comfortably; it’s not about giving up on the things you enjoy but reducing some costs.

Budgeting basics

  • First, make sure you have enough money for your day-to-day living expenses such as regular costs and bills.
  • Start with small achievable goals and include some rewards to keep yourself motivated.
  • Make regular deductions from your transaction account to your savings. Turbo-charge your savings by using a high-interest savings account.
  • Be flexible – sometimes bills just start to mount. Accept that you won't be able to put away as much this month. That's perfectly fine as long as it doesn't become a regular occurrence.
  • Monitor your budget - Review it regularly to check if you're on track.
  • If you get an unexpected windfall like a bonus or tax return, direct it straight to your savings.
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Need some help?

Start saving now and open a saving account with us today or speak with one of our staff who can help you draw up an effective budget. Alternatively, start calculating your budget today with our Budget Planner calculator.

  Additional Information
Ask HorizonCall 1300 366 565