skip to log on skip to main content
VoiceOver users please use the tab key when navigating expanded menus

The basics of budgeting

Money in, money out. This is budgeting in its most basic form. Let’s dive a little deeper to see how it could help you save some cash.

Money in, money out

Whether you live week to week on your paycheck or you’re on a hefty income, knowing where your money goes is your first step towards gaining control over your finances. You need to know how much you’ve got left over each week before you can start putting some money aside for the big ticket items that you’re saving for.

But mention the word ‘budget’ to most people, and eyes glaze over. Visions of spreadsheets and endless columns of numbers swim in one’s mind. Plus, the word is inextricably linked with ‘cheap’, ‘frugal’ and ‘low-cost’. Depressing adjectives if you’re the type who likes to live a comfortable life.

Well, guess what? Budgeting doesn't have to be about spreadsheets. And, more importantly, it doesn’t have to mean you only shop from the bargain bins and catalogues (not that there’s anything wrong with that … in fact, it’s a great way to reduce your weekly spend on food). Rather, it’s a handy financial blueprint that tells you where your money is going, so you can see if you’re spending more than you can really afford.

Budgeting doesn't have to be about spreadsheets.
Rather, it’s a handy financial blueprint that tells you where your money is going, so you can see if you’re spending more than you can really afford

Setting up your budget

You could choose an app or online planner to monitor your everyday expenses – these tools have done most of the hard work for you.

ASIC's MoneySmart has a simple online budget planner that covers off on all the major expenses that a typical household faces each year. There are others out there that do a similar job. Once you’ve chosen a tool, set aside a good hour or so to fill it in properly. Word of warning: if you cut corners, then your budget is worth zip. Try filling in every section, even if it means searching a little harder for your last insurance bill. To get the most from it, it needs to include all money coming in, and all money going out.

So gather up all your bank statements, utility bills, insurance bills and any other major receipts. Given that some of these bills are once-a-year payments, you may need to rifle through your drawers, email inbox, filing cabinet or wherever else you stash old bills. If you tend to chuck away bills as soon as you’ve paid them, then you could pull out old bank statements or jump into online banking to identify where your money goes. Going through bank statements line by line could take a little longer – and may require a long mac to keep you going – but at least it’s thorough!

What about all the little things that you don’t have receipts for? The things you paid for with (gasp!) cash. Just think back over the last few weeks and make a good guess. You might know, for example, that you tend to hit up the ATM for $80 about once a week, and that cash sees you through all your morning coffee runs and late arvo chocolate cravings. Just add a line-item to your budget and call it something like ‘Things I buy with real money’.

The key is to be honest with yourself. Put in exactly what you spend on things like takeaway, coffee, booze and fancy restaurants. If you have a habit of grabbing a big bottle of water and bag of chips every time you fill up on petrol, add this in. Remember, it’s for your eyes only. No judgement.

Work out your income and expenses

The ANZ Budget Planner can help you identify your income and expenses and get an idea of what your budget could look like. 

  ANZ Budget Planner

Want help building your financial skills? 

The MoneyMinded program is an award-winning financial education course we developed to help people build their financial skills, knowledge and confidence.

Whether you're looking to create a budget, reduce your debt or start saving, there's something for you.

Find out more

Knowledge is (savings) power

With your brand-new budget in hand, what comes next? Well, now you’ve got the power to do something about where all your money goes.

First step is to identify all the things that are non-negotiable – like rent, utility bills, food and transport. Depending on where you’re at in life, there might be other things, like insurances. Work out how much they add up to over a year. Hopefully, it’s less than your annual income (if not, it’s time to re-evaluate!).

To really streamline things, you might want to do a little more maths. Say you get paid fortnightly. Divide your annual costs by 26 to work out how much of your fortnightly income needs to go towards bills. Then, you could move that amount straight into a ‘bills pot’ – an account that is dedicated to necessities. You might want to use direct debit to pay these bills on autopilot, too.

With all the non-negotiables looked after, you hopefully have a bit of money left over each pay day. You could split the leftovers in half – put half of it in a high interest savings account and use the other half for all the treats that may supercharge your week. This way, you’re saving some, but not depriving yourself of the things that make you happy.

How you split the leftovers is entirely up to you. Often, it depends on your savings goals and how badly you want to save for the house/holiday/car that you’ve set your sights on. But, guided by your budget, at least you can be clear about what’s possible.

Put yourself in control of your finances

Enter your earnings and expenses into our Budget Planner.

Work out your budget