There are people who enjoy creating household budgets in Australia. They are eager to know how much money comes in, the expenses on a certain period of time, and the ways to cut costs. But for others, budgeting can mean spreadsheets and constant tracking that can lead to disappointment and wasted energy.
Be prepared to redo your plan every six months or whenever there’s a major change in your income and spending.
Setting up a household budget plan need not be a waste of time and effort. With some consideration, and a household budget planner, you can create a good plan that will help you achieve your goals sooner.
Here are seven steps to create your household budget plan:
1. Set financial goals
A household budget needs goals. What do you want to achieve? Build your savings? Go on a holiday? Buy your own car or home? Knowing what you want can help you stay motivated to stick to your budget plan and meet those goals.
2. Assess your current financial situation
Know your total expenses per month. Check your electric and water bills, receipts, car costs, grocery bills, and mortgage payments. Also, know how much money you’re earning every month. This includes your regular full-time/part-time job, money from investments, etc.
3. Know how much you can spend each month
After knowing your income and expenses, do the math and find out what you actually have for your needs. A household budget calculator will be useful in this step. If it’s lower than what you’ve expected, don’t worry, as this is what the household budget planner is for.
4. Prioritise. With your list of expenses, divide them into two groups: fixed and variable
Fixed expenses include rent or mortgage, while variable expenses are grocery, entertainment, etc. Look at areas where you can cut costs so you’ll have money allotted for more important things such as savings – if that is your goal.
5. Print your completed household budget planner
A vision board works if you see your goals frequently. The same can be true for your household budget plan. Before grocery shopping, check your budget and stick to it.
6. Monitor your progress
Creating a good household budget plan can take some time, so track your spending and income regularly, and make some adjustments when necessary.
7. Revise your household budget plan when there are major changes
Significant changes such as having a baby or losing a job obviously affect your monthly household budget. Be prepared to redo your plan every six months or whenever there’s a major change in your income and spending.
Got other household budget tips in Australia? Share your insights in the comments section.