Finance News

3 simple steps to create a budget

Nearly two out of five Aussies believe budgeting is too much effort, but these quick tips could make it a simpler task.

According to a survey by AMP, around 75% of Aussies will be going into 2018 with no specified budget, which is probably going to make achieving financial goals, whether it’s getting out of debt, going on that long overdue holiday or saving for something big, a bit difficult.

Despite the rise in technology,  the study found that those people that did have a bit of a budget in place, often said they tracked it via their bank account, a spreadsheet or by putting pen to paper, with few people saying they used an app to simplify the process.

With that in mind, we’ve pulled together some simple steps and useful ideas to hopefully make managing your cash and budget a little easier over the year ahead.

Ways to make your cash go further

Being aware of what you earn, what cash is required for the necessary stuff, and what money you’d like to have left over to do the things you enjoy, are important in creating the right budget for you. It may help you to see where you can improve and how you can make new savings.

  1. Figure out what money is coming in
Firstly, identify your ‘net’ pay. This is what you earn after your employer puts some of your earnings into super (depending on your employment situation), and income tax is taken out. Remember to also include any other sources of money you might have access to, such as government assistance, interest on savings, or earnings on investments.

  1. Work out what must be paid
Once you know what money you have access to, you’ll then need to work out your mandatory expenses. These are those things that you have to pay in order to get by.

They might include:
  • Your rent or mortgage
  • Groceries
  • Public transport and vehicle costs (petrol, tolls, insurance, rego)
  • Bills (gas, electricity, water, council rates, strata, internet, mobile)
  • Medical and dental expenses
  • Existing repayments(credit cards, education debt, personal or car loans).
If you get to this point and think realistically there isn’t much left to play around with, you could look into whether there are any potential ways of cutting back. For example, could you reduce your spending on food or negotiate a better deal on your phone, internet and energy bills?

  1. Consider what things you want to have money left over for
Once you have covered the important stuff, you’ll want to consider what money is left over for you some luxuries.

They might include:
  • Pay TV
  • Gym membership
  • Hair and beauty
  • Ubers and taxis
  • Takeaway food
  • Nights out
  • Weekends away / holidays.
If you don’t have enough cash on hand for all the things on your luxury list, that’s when you may need to evaluate what’s most important to you and make some sacrifices.

Where technology can help

Once you’ve formulated a bit of a plan around how you’ll budget and maybe put a little money aside on a regular basis, keeping track of things can still be a bit tricky.

In reality you don’t need to spend hours on excel spreadsheets to create workable budgets, as there are free apps available that can do the work for you more efficiently.




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ASCK Pty Ltd (ACN 105 450 566), trading as AMEGA Financial Solutions is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited Australian Financial Services Licensee and Australian Credit Licensee 232 706. General advice warning: This website contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.

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