How is a budget helpful?
Budgets are important.
They help you to;
- Take control of your money
- See your income and expenses
- Know where you stand financially
- Direct money to your priorities
- Find a balance between saving and spending
How can I put together a budget?
It is easy to put together a budget: https://moneysmart.gov.au/budg...
- First you list all of the money you receive including salary, Centrelink benefits, money from family or investments – this is your income.
- Then you list all of the money that you spend including for things like food, rent, electricity, phone and transport – these are your expenses.
- Add everything up and subtract your expenses from your income to compare the amount of money coming in, to the amount of money going out.
- Do you bring in enough income to pay for all your expenses, and set money aside for your savings? If so, Great! It is important that you spend LESS than what you earn – this is called having a SURPLUS. If you don’t earn enough income to cover everything, then you have a budget DEFICIT. The only two ways to deal with a deficit is to either increase your income or decrease your expenses.
Important things to keep in mind
When we have an idea about what we are spending our money on we need to identify and think about;
- Our personal priorities.
- Needs vs Wants – what we want versus what we need. This will differ from person to person.
- Spending Leaks – Unnoticed spending eg: buying lunch instead of taking it from home or that coffee you
- buy on the way to Uni each day.
- Financial goals.
Budgeting & saving tips
- Make sure you have a savings habit – everyone needs savings. The easiest way to do this is to PAY YOURSELF FIRST – this creates a savings habit.
- Without savings people struggle with unexpected expenses. Without savings, many people may in desperation resort to high interest credit options such as a pay day loan. Those repaying debts or on payment plans may find they cannot maintain payment arrangements.
- When you pay yourself first you make savings a priority rather than just putting away what is left over at the end of the pay period – which is often nothing.
A savings habit builds resilience by enabling you to manage your financial challenges without having to rely on credit or other support. It enables you to take greater control of your finances and ultimately – your life.
A savings habit also allows you to;
- To buy things that are more than you can normally afford
- Be prepared for special events – weddings, Christmas, birthdays
- Have a buffer against unexpected expenses
- Security – knowing you have money put away for the unexpected is great for self esteem
- Opportunities for the future
If you would like to learn more about budgeting and creating a savings habit you should talk to a Financial Counsellor.
How can a financial counsellor help?
Financial Counsellors help people who are experiencing financial difficulty. They are skilled professionals who will guide you through your options and help you plan your way out of debt.
They may be able to assist you by:
- Doing a full assessment of your financial situation, including regular income and expenditure, assets and liabilities, to help you fully understand your position, create a budget and put a plan into place
- Providing advice on how to negotiate with your creditors, government agencies or other providers
- Negotiating directly with your creditors in certain circumstances
- Providing advice about what options, rights and responsibilities you may have
- Referring you to other services you may need, such as legal services, crisis food and accommodation services, and health services
What can a financial counsellor provide information about?
They can provide information and advice about:
- Credit and debt-related matters
- The rights of debtors
- How to lodge complaints with various ombudsman schemes if you feel you are not being treated fairly and whether you should have been given a loan in the first place
- Working out a realistic payment plan for debts
- How to access other specialist support services, including gambling, family support, personal counselling, legal aid and emergency relief
It’s then up to you to make the decisions about how to manage your situation with the advice you’ve been given.