Are you aware you need to change your spending habits, but not sure where to start?
A budget can help you get back to basics and work out what’s going where and when.
Whatever your plans, a budget can help you to:
- get more organised with your finances
- cut down spending in areas you have a tendency to overspend, like clothes shopping or eating out―this can significantly help you cut your debt
- save for a specific goal like going overseas or buying your first property.
Once you’ve set up your budget, it can be easier to keep track of your spending, change your habits and reallocate your funds to achieve different goals.
How to build a basic budget
First, work out your income. Include your salary, plus any bonuses and investment income. Then, divide your money into six main buckets:
- Living expenses—include rates, utilities, telephone, groceries, medicines, clothes, education, pets, child care and home maintenance.
- Transport—include petrol, vehicle registration, repairs, parking, and public transport and taxi fares.
- Loans, credit card and store accounts—include home loans and personal loans.
- Taxes, fees and charges—include taxes on any investments, and fees and duties.
- Insurance and superannuation—include life, health, super, home and contents, car, business and any other insurance.
- Leisure and entertainment—include holidays, eating out, takeaways, sporting memberships, movies, in-home entertainment, books, music and gifts.
For each bucket, indicate how much and how often you need to pay—weekly, fortnightly, monthly, quarterly or annually.
Managing and sticking to your budget
Once you’ve crunched the numbers you can start looking at areas you can make savings.
You don’t have to do it all by hand. There are plenty of tools to help you manage your finances:
- A simple online tool like AMP’s Budget Planner Calculator can help you tally up your expenses and work out how much you have left over.
- My AMP has a feature called Money Manager that gives you a bird's-eye view of your finances. Select the 'Manage non-AMP accounts' tab and follow the prompts.
- The AMP Bett3r account is a smart bank account that helps you manage your money and save for your goals.
Like to know more?
Here’s a quick checklist to help you get started. And if you’d like to know more, you can:
- Check out more of our budgeting and savings tips
- Talk to your financial adviser or if you don't have an adviser call us on 131 267 from 8:30am to 7pm (AEST) Monday to Friday or go to our find an adviser tool.
Paying off study debts coupled with wage growth can make a big difference.