A budget gives you control over your money and less stress about bills and unexpected costs. Use this simple guide to get started.
Why you need a budget
A budget is more than just numbers. It helps you to:
check_box see where your money goes
check_box track your spending so you can quickly spot waste, and spend smarter
check_box save for the things that matter
check_box avoid running out of money before payday
check_box reduce the need to use credit cards or other loans for everyday expenses
An easy way to start is with the Moneysmart budget planner. It guides you through every step, shows totals clearly, and lets you test different savings goals so you can plan confidently.
5 steps to create a budget
Step 1: Add your income
List all the money that’s coming in, including:
- wages or salary
- government payments
- investment income
If your income varies from week to week, work out an average amount. Enter these numbers into the budget planner first to get a clear starting point.
Step 2: List your expenses
Expenses are what you spend to live. Start with your essentials like:
- rent or mortgage payments
- groceries
- electricity, rates, gas and phone bills
- medical costs
- insurance premiums
- transport costs, like car registration, petrol, or public transport
- other regular costs that you know about
Then add debt expenses, such as:
- personal loan repayments
- credit card payments
- other debt repayments
Finally, include irregular or unexpected costs. For example:
- car repairs and services
- annual bills
- pet costs
The budget planner separates these costs into sections so you can see totals clearly.
To make sure you've recorded all your expenses, look at your bills or bank statements. Include what the expense is for, how much and when you pay it.
Step 3: Compare income and expenses
The planner will show if:
- you have money left over, or
- you’re spending more than you earn
If you have money left, you’re able to save. If you’re spending more than you earn, look for some ways to reduce your costs.
One of the biggest regular costs for Australians is groceries. Check our tips on ways to save on food and fuel.
Step 4: Set your savings goal
Savings give you a safety net for unexpected costs. Even small amounts add up over time.
Use the budget planner to test different savings amounts and see how it affects your overall plan. This helps you avoid relying on credit or loans when emergencies happen.
Step 5: Review and adjust
Your budget needs to work for you and your lifestyle so it's important to adjust your budget as things change. Update it when:
- your income changes
- your bills increase
- your goals change
Checking your budget each month keeps it accurate and helps you stay on track with savings.
Make budgeting easier
To help make budgeting easier, consider having separate bank accounts. You could have:
- a transaction account for bills and expenses
- a transaction account for spending
- a higher interest savings account
You can then automate your budget by setting up a regular transfer to your savings account on pay day. You can also set up direct debits when your bills are due.
Also check out our tips on managing on a low income, managing on a casual income, and avoiding sales pressure.