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.