A budget can help you work out what you’re spending money on and when.

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 makes it easy 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 seven 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, public transport fares 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/duties.
• Insurance/superannuation—include life, health, super, home and contents, car, business and any other insurance.
• Leisure/entertainment—include holidays, eating out, takeaways, sporting memberships, newspapers, books, music, gifts.
• Savings—if you want to save money on a regular basis, for holidays, investments or a rainy day.

For each bucket, indicate how much and how often you need to pay—weekly, fortnightly, monthly or annually.

Managing and sticking to your budget

Then, 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 out there 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.
• There are even apps like MoneySmart’s TrackMySPEND that allow you to track your personal expenses on the go.

Need a hand?

Let us help you to use the power of budgeting to achieve your financial goals. 

Important information © AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.