Updated on 18 December 2023
4 minute read
A budget is a roadmap for your financial journey. It helps you take control of your money in the new year ahead. Use our budgeting tips to help you plan how to budget and save for that dream holiday.
What is a budget?
The past year has been challenging for many Australians. You might have experienced some of it with the increase in living expenses such as rising rent, mortgage payments, energy bills, and grocery prices.
A budget helps you track your bills and other costs, know where your money is going, and put aside money correctly. It can also help you to achieve your financial goals. Creating a budget is an excellent way to take control of your finances and prepare for the unexpected.
If you'd like to know more about how to budget, read on for budgeting tips to help you.
Why is making a budget so important?
To put it simply, budgeting puts you in control of your financial situation.
The start of a new year is a great time to review your spending and set a practical plan for the year ahead. Knowing how to make a budget gives you a clear understanding of the steps you need to take to reach your financial goals. It can also give you real peace of mind that you'll be able to cope with surprises.
How do I make a budget?
Budgets should be both ambitious and realistic. Avoid setting goals that you won't be able to achieve, but don't limit yourself either.
Begin the new year right with these budgeting tips.
1
Set your financial goals
Having a clear goal is a great motivator when it comes to saving money. It could be saving for a home deposit, a family holiday, paying off debt, or having a little extra for a rainy day. You might even be dreaming about sailing the world in your retirement.
Retirement calculator
Our Retirement Calculator can give you an idea of how much you’ll need for the retirement you want.
2
Work out your income
Be sure to know exactly how much income you’re earning. This includes your salary and any other income such as government benefits, side hustles or investment income such as a rental property.
3
Add up all your expenses
Make a list of all your regular bills. This includes mortgage or rental costs, utilities like energy and water, loans, clothes, entertainment and even your daily coffee! Have you checked your bank statement for direct debits you’ve forgotten about? Are there subscriptions you no longer use? You might be surprised how small regular payments can add up over time.
4
Track your spending
There are many tools and apps available to help you manage your money. The MoneySmart website offers calculators and resources to better understand your finances and spending habits.
5
Pay yourself first
Salary sacrificing is an easy way to get started if you want to build long-term wealth. It means you automatically make extra payments to your super from your salary before tax. It’s a great way to build up your super, and it can have significant tax advantages.
Contributions calculator
Use our Superannuation Contributions Calculator to see the difference a little extra could make to your super.
6
Open a savings account
You could think about setting up a separate savings account. This is a great way to keep track of your savings and easily check on your progress. It’ll also help you maintain good financial habits.
7
Check the health of your super
Log in to your superannuation account to make sure you’re being paid super correctly. You should also review insurance cover premiums, and fees and costs so you don't pay more than you need to. Consolidating1 your super or switching your investment options could mean a larger balance for a more secure retirement. And it can all be done in minutes.
Log in to Member Online or download our app to check how your super is tracking.
8
Get debt under control
List your debts by balance from smallest to largest. Start by paying off the highest interest rate debts first. This way you can repay your debts one by one until you’ve paid them in full. Credit cards, for example, have high interest rates and paying them off can save you thousands. You might think about setting up a repayment plan with your bank or financial institution to pay off credit card debt as quickly as possible.
9
Educate yourself
There are a lot of resources out there to help you learn about money matters, including superannuation and investing. Sign up for our podcast to learn from others and make confident decisions.
10
Review your budget regularly
Make it a habit to review your budget monthly to make sure it’s still working for you and your lifestyle. Set a reminder in your calendar to do this at a time that's free of distractions. At first, it may seem difficult but with time it will become second nature. Adjust your budget where necessary – that’ll help you stick to it so you can reach your goals.
Get expert advice
We can help you get your super on track for the lifestyle of your dreams. Advice about your accounts is included with your membership.2
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