Keeping track of your money will help you gain more control over your finances. Preparing a budget will help you understand how much money you have and how much you need to meet your expenses.
To prepare a budget, begin by writing down all your income and expenses and then calculate the difference – follow the steps listed below. To track your expenses, try keeping a daily spending diary for a couple of weeks and write down where all your money goes. Another way to record your expenses is to download an app on your mobile phone – see the online tools section below.
If you are not sure where to start or your finances are complex, you can ask a financial counsellor or financial planner for assistance. Once you have prepared your budget, review it regularly, as your circumstances change.
Topics on this page:
Steps for preparing a budget
1. Choose a time frame
Decide if your budget will be weekly, fortnightly or monthly. Many people choose the time frame that matches their pay period.
2. Write down your income
- take-home (net) pay
- income from investments, shares or property
- government benefits, such as Centrelink payments
- child support payments
- repayments from anyone who owes you money (debtors)
- any other income.
3. Write down your expenses
- housing – rent/mortgage, council rates, strata fees
- loan repayments – car loan, personal loan, credit cards
- utilities – electricity, gas, water, phone, internet, pay TV
- insurance – home and contents, car, private health, life
- health – medical, dental, pharmaceuticals, optical
- transport – petrol, registration, repairs, fares, parking fees
- education – child care, school fees, excursions and uniforms, HECS/HELP
- food and groceries
- clothing and shoes
- personal care (e.g. haircuts)
- entertainment, holidays, gifts
- unpaid fines
- tobacco and alcohol (if used)
- incidentals (pocket money).
4. Calculate the difference
Work out the difference between your income and expenses. If your expenses are greater than your income, read the section below on how to balance your budget.
- Find a budget planner online. Try moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner
- You can record spending with a mobile phone app – visit the App Store (Apple phones) or Google Play (android phones) to see what is available. For example, TrackMySPEND is a free, easy-to-use app provided by the Australian Government.
How to balance your budget
Sometimes people find they spend more than they earn, that is, their expenses are greater than their income. If this is the case for you, you may want to explore ways to reduce your expenses and/or supplement your income. The information below lists some possibilities, but whether they are available to you will depend on your individual circumstances. You can read more about each option by following the link, or talk to a financial counsellor.
Ways to reduce debts and expenses
- Thrifty tips
- Electricity, gas and water bills
- Telephone and internet bills
- Council rates
- Loan repayments
- Credit card payments
- Tax debt
- Medical expenses
- Transport and accommodation
- Education expenses
- HECS/HELP debts.
Ways to find other income
- Plan your meals for each week or fortnight and shop with a list; buy in bulk and avoid buying on impulse.
- Go shopping after a meal – hunger can prompt you to buy more food than you need.
- Think about how much you might be spending on coffee, alcohol, tobacco, takeaway food and eating out – all these expenses can add up.
- Take a packed lunch rather than buying it.
- Reconsider any regular payments or subscriptions (e.g. pay TV, magazines, online services).
- Borrow books and DVDs from the library.
- Close curtains at night and use a door snake (draught excluder) to cut heating costs.
- Use energy-efficient devices.