How to create a budget and stick to it
Take a look at the basics of creating a budget, with some handy tips to help you get into the habit of budgeting every month, from using helpful tools to making it more fun.
But take a deep breath, and dive in. You’ll feel better for it. Your budget is made up of your income, your expenses, and the savings you want to make – these savings can be based on how much money you have left over after you’ve subtracted your expenses from your income.
Hot tip: If your outgoings are more than the money coming in, this is living beyond your means, and you’re on the path to being in debt. But the difference is that now you know exactly where you stand, and can make some adjustments to your spending.
There's no need to painstakingly input every purchase and expense you make into a spreadsheet, or write it out by hand. Make technology do it for you!
There are some great apps and online platforms that track every transaction going in and out of your account, then categorise them and show you an overview of your spending in simple graphs and diagrams. You can set budgets for each category of spending, and get real-time updates on whether you’re going to stay within your budget, or you’re overspending.
Westpac's free spending tracker and budgeting app is called CashNav, and it helps you to identify trends in the way you’re spending. Check out CashNav here.
It’s all too easy to lie to ourselves about the real amount of expenses we have, or what we spend our money on. But if you create an unrealistic budget – conveniently leaving off things you know you spend on, like a bought lunch three times a week, Friday drinks at your local or your regular trip to the hairdressers – you’ll always be playing catch up. And you’re more likely to be running dry days before payday. So be honest, and put all your expenses in your budget.
Read about Creating good habits for payday.
One of the easiest ways to let your budget slip is by not keeping up with your savings goals – whether that means not putting aside as much as you intended one month, or by tapping into savings that you didn’t want to touch. A couple of tips to help your savings discipline: