Text version: Managing your money

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June 2017

About ASIC and MoneySmart

The Australian Securities and Investments Commission (ASIC) regulates financial services in Australia. MoneySmart is our website designed to help you make smart choices about your personal finances. It offers calculators and tips to give you fast answers to your money questions.

Visit www.moneysmart.gov.au or call ASIC on 1300 300 630.

Take charge of your money

Want to know the secret to being good with money?

In just a few simple steps, you can take control of your money, instead of feeling like it controls you.

Whether you have a little money or a lot, this booklet will help you:

  • get off the treadmill of living pay-to-pay
  • ease money stress and stay on top of your bills and commitments
  • direct your money to where it matters most
  • set goals so you can enjoy more of the good things in life.

Steps to taking control of your money

  1. TRACK - your day-to-day spending
  2. COMPARE - money in and money out
  3. PRIORITISE - where you want your money to go
  4. ACT - to make your money work for you

Step 1: Track your day-to-day spending

Where is my money going day-to-day?

You may think spending up on big things is what gets you into trouble with money.

But often it is the everyday little things that end up costing more over time.

Where does your cash go each day? It's easy to lose track of $5 here, $10 there.

Do a spending diary

The way to find out where your money is going is to do a spending diary.

Make a note of everything you spend for one pay period or at least a week. This will only take a few minutes a day.

You can do this just for yourself, or together with a friend or partner.

Get to know your habits

Tracking your spending is a reality check.

It's not about judging yourself, it's about getting to know yourself better.

By looking closely at your daily money habits, you will be able to make realistic choices about where you want your money to go.

Track your spending

Understand your daily spending habits

5 minutes a day

Choose how long to track

Decide how long to track your spending:

  • one week (minimum)
  • two weeks (if you get paid fortnightly)
  • four weeks (if you get paid monthly).

The important thing is to do it every day.

Get a notepad or app

Get a small notepad to use as your spending diary. Take it with you wherever you go.

Or, if you have a smartphone, download our free TrackMySpend app.

Record what you spend

Record everything you spend. Do this straight away.

Keep receipts if you buy a few things at once.

Don't try to alter your spending habits. Just notice where your money goes.

Add it up

At the end of the tracking period, add up everything you have spent.

Now you have a good snapshot of your current day-to-day spending.

Smart tip: Get our free spending tracker app

Download our free TrackMySpend app so you can get real-time data on how much you are spending.

Sample spending diary



What I bought

Mon 23rd


weekly train ticket




Tues 24th









Maria saves for a holiday

'I am planning to go for a beach holiday next year. After doing a spending diary, I made a few small changes to reduce my daily spending.

I am now saving an extra $100 a month towards my trip. Sun and sand, here I come!'

Smart tip: Fine-tune your spending habits

Anything about your daily spending habits you would like to change? See simple ways to save money.

Step 2: Compare money in and money out

Where is my money going month-to-month?

Now you know where your cash is going day-to-day, the next step is to look at where your money is going month-to-month.

How much money is coming in? How much is going out?

Think about where your money goes each month:

  • weekly basics like food, groceries, transport
  • regular bills like rent or mortgage, electricity, phone, insurance
  • less frequent spending like clothing, holidays, car registration, medical expenses.

Do a budget

The best way to take control of your household finances is to do a budget. This is a simple tool that helps you understand the money going in and out of your household.

It shows you if you are spending more or less than you can afford. You can then take action to find the right balance between spending and saving.

Smart tip: Use our free online budget planner

Want your computer to do the hard work for you? Use MoneySmart's free online budget planner.

It is easy to use and you can save and print your results. You can use either the online version or the downloadable Excel spreadsheet.

No calculations to do - the budget planner does it all for you.

You can also use our simple money manager - a quick and easy budgeting tool translated into community languages.

Do your budget

Understand the money going in and out of your household each month

30 minutes

You will need:

Put your details into the budget planner

Gather details of your income

How much money is coming in?

Check pay slips, bank statements and investment statements.

If your income is variable, make an estimate based on your past year's earnings.

Gather details of your expenses

How much money is going out?

Look at bills, bank statements, credit card statements, your spending diary (above), receipts and shopping dockets.

Use your best guess if there is anything you can't find, or if bill amounts vary across the year.

Put your income and expenses into the budget planner

What is my current situation?

Put your income and expenses into the budget planner.

Save your budget as 'Budget Month Year', for example 'Budget January 2019'.

Neal stays on top of a variable income

'I run my own business as a landscaper. So my income and expenses go up and down through the year. At first, I found this hard to manage. But doing a budget helped a lot.

To work out my monthly cash flow, I looked at the total of what I earned across the year. Then divided by 12 to get an average.

When I earn more than usual I put the extra into savings, to get me through the leaner months.'

Compare your income and expenses

Once you have done your budget, it is time to compare your income and expenses. Is your income higher or lower than your expenses?

That is, are you living within your means or spending more than you can afford?

I am spending less than my income

That's great, now you know how much money you have to put towards your goals and lifestyle choices.

Your next step is to fine-tune the balance between your spending and saving. See Step 3 (Part 2) for guidance on how to do this.

I am spending more than my income

This is not the end of the world, but you do need to take action to fix this. Keep spending more than you can afford each month and you risk sliding into debt - easy to get into, harder to get out of.

Your next step is to reduce your expenses to an affordable level. See Step 3 for guidance on this.

When you've got that sorted, you'll be able to move on to planning for your future goals.

Smart tip: Get free help with sorting out debts

If your debts are getting out of control or you are struggling to make ends meet, it is important to act quickly. Help is available.

A financial counsellor can help you get a clear picture of your situation, understand your options and work out a budget.

To find a free financial counselling service near you use our financial counsellors map or call the National Debt Helpline on 1800 007 007.

Suzette and friends talk about money

'Being on my own, it can be tough having to make every decision about money by myself. Recently, I've been finding it really hard going.

So I decided to talk to a few of my friends. What a relief! It turns out that all of us have had money issues at some time. Now we can support each other.'

Smart tip: Simple ways to save money

There are many ways to make your money go a bit further. Here are a few:

  • Join your local library - borrow books, audio books, magazines, CDs and DVDs for free.
  • Look for pre-loved bargains - check op shops, free online swap meets and local markets for bargains.
  • Be creative - involve friends or family in coming up with ideas for fun, low-cost entertainment such as picnics and outings, free concerts and exhibitions, half-price movies and shows.
  • Make small changes  - stop buying takeaway coffee, make your lunch at home and bring it to work, cancel your gym membership if you don't use it and start walking.

For more simple savings tips, see simple ways to save money.

Step 3: Prioritise where you want your money to go

How do I make my money go where it matters most?

The next step is to refine your budget and direct your money to where it matters most. This will help you find the right balance between spending and saving.

How does a budget work in practice?

It might sound simple, but using buckets is a good way to sort out your money priorities. Imagine you have a big bucket filled with water. This represents all your money coming in - the total income you entered into the budget planner.

Then you have three smaller empty buckets to help you work out where you want your money to go. Of course you can't pour out more water than you have. So, with the amount available, you decide how much to put into each bucket.

Money in

Money out


basic necessities - need these to live on


lifestyle choices - want but could live without

[bucket of money] [bucket for basics] [bucket for goals] [bucket for extras]

all income

daily living expenses such as rent and food

paying down debt, building up savings

your spending choices

How to use the budget buckets

First, put in enough money from your income bucket to take care of your needs. These are the basic necessities, the expenses you have to pay in order to live.

Then, work out what you can afford for your wants. Divide up the rest of your money between your saving and spending.

Money in

Money out

Money out




  • Your take-home pay
  • Your partner's take-home pay
  • Centrelink benefits
  • Family benefit payments
  • Child support received


  • Rent or mortgage
  • Food and groceries
  • Gas and electricity
  • Transport
  • Health care


  • Paying off debt
  • Building savings
  • Holiday
  • Car
  • Education
  • Superannuation


  • Eating out
  • Entertainment
  • Recreation
  • Personal spending or pocket money
  • Gifts and donations

Prioritise your needs and wants

Identify where you can reduce your expenses and save money

20 minutes

You will need:

  • a print-out of the budget planner or the hand-written planner you created in Step 2.

How to reduce your expenses

First, highlight the most important things in your budget - your needs or basic necessities.

Then, identify the things you want but could do without, if you had to.

What can you cut out or cut back?

Switch or save


  • Are there memberships or subscriptions you could cancel or get for a lower cost?
    • gym, clubs
    • magazines, pay tv
  • Is there a cheaper mobile phone plan?
  • Can you shop around for a better deal on car or contents insurance?
  • Are you paying for more health cover than you need?
  • Could you switch to a super fund with lower fees?


  • What can you get for free or cheaper elsewhere?
    • use the internet at the library
    • watch freeview instead of pay TV
  • How could you spend less on groceries?
    • take a list and only buy what is on the list
    • look for home brand products and items on special
    • buy in bulk and only go shopping once a fortnight
  • Can you reduce your spending on eating out?
    • make lunch instead of buying takeaway
    • have a dinner party and get everyone to bring a plate
  • Can you save on your electricity bill?
    • switch appliances off instead of leaving in standby mode
    • use a fan instead of air conditioning
    • pay in instalments, so you have less to pay in one go

Smart tip: How to increase your income

  • Are you getting all the Centrelink benefits you are entitled to?
  • Could you earn more money from part-time work or hobbies?
  • Do you have any unwanted goods you could swap or sell?
  • If you have adult children living with you, are they contributing towards household costs?

List your savings and cuts

Make a note of all the items you could cut out or cut back.

Then check:

  • Is this realistic?
  • Do you need to cut back on all of these items, or just some?
  • What are the most obvious ones to start with?

Even if you need to reduce your expenses a lot, try not to cut out everything in your 'wants' bucket.

By allowing yourself a treat now and then, you will find it much easier to stick to your budget.

Smart tip: Shop with cash instead of credit.

With a credit card, it is easy to spend more than you can afford.

Keep in mind that a credit card is really a debt card. If you don't have the money to pay cash for something today, will you have the money next month when the bill is due, plus interest and charges?

It is often easier to keep to a budget if you use cash, EFTPOS or a debit card when shopping.

Try saving up or using lay-by instead of a credit or store card to make big purchases like a TV or washing machine. Pay your purchase off in instalments, and avoid extra fees or charges.

Set goals for the future

Set goals for the future and make a plan to achieve them

20 minutes

Having worked out ways to reduce your expenses and save money, you are ready to start planning your future goals.

What do you want from life? Why?

Setting goals for yourself - whether large or small, short or long-term - is exciting and motivating. You may surprise yourself with how much you can achieve when you put your mind to it!

What are some possible goals?

Reduce your debt...

Start to save...

Pay off:

  • your credit card
  • a personal loan
  • a car loan
  • your mortgage

Save for:

  • a holiday or weekend away
  • Christmas presents and celebrations
  • a 'rainy day' fund, for big bills or emergencies
  • your wedding
  • a home deposit
  • your children's education
  • starting your own business
  • extra super contributions
  • your retirement

Set your goals

Think for a moment, then write down some possible goals. Now:

  • What is your top priority?
  • How much will it cost?
  • When would you like to achieve it?

If you have borrowed money on a high interest rate, make paying off that debt your first priority, before taking on other goals.

Make your plan

Be specific about what you want to achieve, how much you intend to save, and by when. Our savings goals calculator can help you work out how long it will take you to reach your goal.

If you would like to save for several goals at once, fill in these details for each goal. Make sure this is realistic and affordable.

Goal 1





How much


Goal 2





How much


Smart tip: How to achieve your goals

  • Start small - begin with something small (for example, a weekend away or start an emergency savings fund).
  • Be specific - work out exactly what you want and why.
  • Be realistic - set yourself a reasonable amount of time.
  • Share it - talk about your goal with a friend, partner and/or children, to stay motivated.
  • Reward yourself - celebrate each step along the way to reaching your goal.

Refine your budget

Create a household budget that works for you

20 minutes

You will need:

  • your saved budget or hand-written budget planner (Step 2),
  • your list of identified cuts and savings (above),
  • your future goals plan (above).

Update your budget planner

Set your spending targets

Go through each part of your budget in turn.

Update the amounts in your budget to match your chosen cuts and savings.

Add in your goal

Add in the amount you are going to save for your goal (or goals).

Balance your spending and saving

Check that the way you have put your money into each category looks and feels right to you:

  • Have you been realistic in allowing enough money for your everyday needs?
  • Have you made enough cuts and savings to free up the money you want for your goals?

If not, adjust your amounts until you are happy you have the balance working across all categories.

Then save the new version of your budget and you are done.


Step 4: Act to make your money work for you

How do I make my budget happen?

Now that you have your budget working, it is time to take the final step and put it into action.

The trick is to make this as easy as possible for yourself, by making things happen automatically. That way you won't have to work at your budget - you will make your money work for you.

Pay important bills by direct debit

If you are regularly paid a salary or benefits, set up a direct debit from your bank account for the day after the money is deposited.

This works well for things like:

  • rent or mortgage
  • personal loan or car repayments
  • paying off a backlog of credit or store card debt.

If your income varies, or the bill amount varies, keep a close eye on your bank balance to ensure you have enough money in your account.

Smart tip: Easy ways to save for your goals

  • Start now - no matter how small the amount you can put aside.
  • Pay yourself first - get savings deducted from your pay or benefits automatically; most people don't miss what they don't see.
  • Keep your savings separate - put your savings into a separate account with no ATM access.
  • Add in your windfalls - try to save any pay rises, bonuses or tax refunds.

Antonia and Rudi simplify their extras spending

'After doing our budget, we didn't want to try to track every dollar in every category - especially personal spending.

So we set up each member of the household (two adults, three teenagers) with their own cash card account, with a set allowance to spend however they like.

Not only is this easier for us, our kids are now taking more responsibility for their spending.'

Smooth out your big bills

Do you find that some months are more expensive than others - due to big bills, birthdays or unexpected events? Here's how to smooth out the ups and downs of your expenses.

Mark your calendar

  • Go through your budget (below) and highlight the big bills that come less often, like contents insurance, car registration or school fees.
  • Work out when (month/day) each bill is usually due. You may need to look back at the bills you collected in Step 2 (Part 2).
  • Mark each bill on your calendar or a yearly planner - together with birthdays and periodic events - so you know when you are going to need more money.

Set aside money

  • Add up how much your big bills cost in total for the year. If you wish, add an extra amount for gifts and celebrations.
  • Work out how much this is per pay or benefit period (for example, per fortnight).
  • Put this amount aside each time you are paid - by direct debit into a separate 'big bills' account or whatever works best for you.
  • Then you will have the money ready to cover the next big bill or special event.

Ask about bill smoothing

  • Contact your utilities providers (gas, electricity, water) and ask about 'bill smoothing'.
  • See if you can arrange to make fortnightly or monthly payments to them, instead of having to pay the whole bill in one go.

Arrange Centrepay

  • If you receive Centrelink benefits, ask about Centrepay.
  • This free service enables you to pay your utilities and other bills by having a regular amount deducted from your benefit payment.

Stay on track

After all your good work putting your budget in place, how do you ensure you stay on track?

CARE for your money

  • CHECK your budget at least once a year to see how you are tracking, and update amounts if you need to.
  • ADJUST your budget if your circumstances change (for example, if your pay goes up or down, you fall ill or lose your job, get married or start a family).
  • REWARD yourself with regular treats, so that living with a budget does not feel like a chore.
  • ENTHUSE yourself by putting a picture or chart of your goals on the fridge as a daily reminder.

Go the distance

If you keep your budget going, you can progressively achieve bigger goals, like:

  • going on holiday,
  • buying a car,
  • putting your kids through school, or
  • saving for retirement.

Taking charge of your money means less stress, more control - and a feeling of moving forward with confidence and ease.

Now you know the secret to being good with money. A few simple steps really do make a difference.

Other useful publications

Visit ASIC's MoneySmart website for calculators and tips to give you fast answers to your money questions.

Download these free publications and more or order them from ASIC on 1300 300 630 (at no charge).

Budget planner

Understand the money going in and out of your household each month

30 minutes

Gather details of your income

How much money is coming in?

Check pay slips, bank statements and investment statements.

If your income is variable, make an estimate based on your past year's earnings.

Gather details of your expenses

How much money is going out?

Look at bills, bank statements, credit card statements, your spending diary, receipts and shopping dockets.

Use your best guess if there is anything you can't find, or if bill amounts vary across the year.

Put your income and expenses
into the budget planner

What is my current situation?

Put your income and expenses into the budget planner.

Adjust all amounts to the same frequency (this planner uses fortnightly figures).

1. MONEY IN: Your fortnightly income

Wages Your take-home pay $  
Your partner's take-home pay $  
Payments Centrelink benefits $  
Family benefit payments $  
Child support received $  
Other* Bonuses/overtime $  
Refunds/rebates $  
Income from savings/investments $  
Other income $  

* Divide by 26 (amount ÷ 26) to convert yearly amounts to fortnightly.

Add the above for your total fortnightly income = Total $ ________ [Box 1]

2. MONEY OUT: Your fortnightly spending*

Shopping Supermarket $  
Fruit/vegetables $  
Other food/groceries $  
Baby products $  
Cosmetics/toiletries $  
Clothing/shoes $  
Pet products $  
Eating out Restaurants $  
Takeaway/snacks $  
Coffee/tea $  
Alcohol $  
Entertainment Movies/music $  
Bars/clubs $  
Personal Personal allowance $  
Pocket money $  
Newspapers/magazines $  
Pharmacy/prescriptions $  
Gym/sports membership $  
Cigarettes/gambling $  
Transport Trains/trams/buses/ferries $  
Petrol $  
Road tolls/parking $  
Goals Savings $  
Extra super contributions $  
Other goals $  
Other Other fortnightly spending $  

* Multiply by 2 (amount x 2) to convert any weekly amount to fortnightly.

Add the above for your total fortnightly spending = Total $ _______ [Box 2]

3. Your monthly spending

Home Rent/mortgage $  
Payments Car loan repayments $  
Other loan repayments $  
Credit card repayments $  
Child support payments $  
Communications Mobile phone $  
Home phone $  
Internet $  
Pay TV $  
Other Other monthly spending $  

Step 1: Add the above for your total monthly spending = Total $ ______

Step 2: Multiply monthly total by 12 (monthly total x 12) = yearly amount $ _______

Step 3: Divide yearly amount by 26 (yearly amount ÷ 26) = fortnightly amount - $ _______ [Box 3]

Smart tip: Use ASIC's MoneySmart free online budget planner

Use our free online budget planner. No calculations to do - the budget planner does it all for you.

4. Your quarterly spending

Utilities/fees Electricity $  
Gas $  
Water $  
Council rates $  
Body corporate fees $  
Health Doctor/medical $  
Dentist $  
Chiropractor/physiotherapist $  
Other health $  
Vet/pet care $  
Education Childcare/pre-school fees $  
School fees $  
Uni/TAFE fees $  
School uniforms $  
Sport, music, dance, etc $  
Excursions $  
Other Other quarterly spending $  

Step 1: Add the above for your total quarterly spending = Total $ ______

Step 2: Multiply quarterly total by 4 (quarterly amount x 4) = yearly amount $ _______

Step 3: Divide yearly amount by 26 (yearly amount ÷ 26) = fortnightly amount $ _______ [Box 4]

5. Your yearly spending

Car Car registration $  
Car maintenance $  
Household Home maintenance/repairs $  
Furniture $  
Appliances $  
Insurance Home and contents $  
Car $  
Health $  
Travel $  
Pet $  
Recreation Holidays $  
Celebrations $  
Gifts/donations Donations/charity $  
Gifts $  
Other Subscriptions/memberships $  
Other yearly spending $  

Step 1: Add the above for your total yearly spending = Total $ ______

Step 2: Divide yearly total by 26 (yearly total ÷ 26) = fortnightly amount $ _______ [Box 5]

6. Your budget calculation

MONEY IN: Put the total from Box 1 here

A. Total fortnightly income = $ ______

MONEY OUT: Add the totals from Boxes 2, 3, 4 & 5 and put their combined total here

B. Total fortnightly spending = $ ______


Subtract Box B from Box A and write the answer here

C. Total income - total spending = $ ______

If the amount in Box A is bigger than Box B, then you are spending less than your income.

The amount in Box C is the amount you have left over each fortnight to put towards your savings goals and lifestyle choices.

If the amount in Box B is bigger than Box A, then you are spending more than your income.

The amount in Box C is the amount you are spending each fortnight above what you can afford.

Contact us

ASIC's MoneySmart website has calculators, tools and tips to help you make smart choices about:

  • Budgeting and saving
  • Borrowing and credit
  • Investing
  • Superannuation and retirement
  • Scams

Call ASIC: 1300 300 630


Please note that this is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice.

© Australian Securities and Investments Commission

Last updated: 16 Oct 2018