Need to save more money? Create a budget!
While many Australians dream of financial freedom, it’s all too easy to get into negative financial habits.
In fact...

  • 46% of Australians say they live pay-cheque to pay-cheque.1
  •  The average Australian credit card holder owes around $4300 per card – that’s approximately $736 paid in interest every year.2
  • 41% of Australians classify themselves as ‘non-savers’.3

That’s why having a budget – even a basic one, can really help you stay on top of your finances.

First things first

Pay yourself by saving some money as soon as you get paid. It’s a good idea to save at least 10% of your post-tax salary, a recurring direct transfer on pay day will help you save money without noticing.

Budget bucket basics

A simple way to visualise a budget is to allocate money from your income into different ‘buckets’. The example below has one ‘Savings’ and two ‘Spending’ buckets (Necessities and Nice-to-haves).

You may have multiple savings buckets depending on your goals. For example, you may have a long term goal to save $40,000 for a house deposit and a short term goal to save $800 for a weekend away. Finally, your ‘spending’ bucket is the money you allocate to ‘necessitates’ and ‘nice-to-haves’.

So how much should go towards each bucket?

Well this depends on your spending habits as well as your savings and financial goals.

A great place is start it to calculate your ‘necessities’ spend per pay cycle as this will give you an indication of how much you have left over to contribute to your savings and ‘nice-to-haves’. Our Budget Planner Calculator can assist.

Getting a bonus or tax refund

If you received a bonus or tax refund this year, this can have a great impact on your budget if you use it wisely. Rather than allocating it all to your ‘nice-to-haves’ bucket, some ideas include paying off debt, such as a low-limit credit card, adding it to a high-interest savings account or contributing extra funds to a long-term savings account such as your superannuation.

Keep your budget relevant

Once you have created your budget, keep on top of it and track your spending. This is particularly important in the first few months while you become accustomed to your spending habits.

There are many ways to record where your money goes, so select the method that suits you best. We also have a handy ‘Savings goal’ feature in our app to help you keep track of your progress.

1. Australia today – A look at lifestyle, financial security and retirement in Australia. MLC, February 2016.
2. https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock
3. MoneySmart brand tracking program, Sweeney Research January 2014 (n=1,380). Note: It is possible some classified as 'non-savers' may be making extra payments on their mortgage, other loans or into their superannuation. https://www.moneysmart.gov.au/managing-your-money/saving/how-australians-save-money