Family budget and money management tips

Why is money management important for families?

Basic money management means you can meet your family’s everyday expenses, handle unexpected bills and save for the future.

Money management also puts you in control of your money, which can reduce stress in your family and help you all feel secure. It lets you enjoy family life, rather than worrying about your finances.

Communication in your family plays an important role in managing money well. Honest conversations with your partner, if you have one, can help to reduce conflict about money. And involving your child in budgeting can help them build financial skills and make it easier to achieve savings goals together.

Why is a family budget important?

A family budget is essential to managing your money.

A family budget helps you:

ensure you have money for your needs – food, housing, electricity, phone, internet, water, transport and medical services
save money for your wants – the things you like but can live without
save money for your family’s future – for example, preparing for another child, buying a house or investing
set aside money for unforeseen expenses – for example, if your car breaks down and needs repairs
stop accidental overspending and avoid debt.

If you’re not confident about budgeting or you need help getting your finances under control, you can use the Australian Government’s Financial Information Service. This service is free and available to everybody. Or you could look into choosing a private financial adviser.

How to get started with a family budget

One way to start budgeting is to list the:

money you have coming in
things you spend money on
things you owe money on.

To do this, it’s a good idea to find and check the following for the past year or so:

salary statements
benefit statements
bills
bank statements
credit card statements.

Be sure to include all the ways that money is coming in and going out, and note whether your earning and spending changes at different times of the year. For example, energy bills are often higher during winter because of heating.

The key to budgeting is sticking to a basic rule – spend less than you earn.

How to work out what you spend

One of the hardest things about making a budget and managing money can be keeping track of what you spend.

The things you spend money on include regular expenses and irregular or one-off expenses.

Regular expenses to include in your family budget

Mortgage repayments or rent
Utilities – gas, electricity, water, phone and internet
Council fees and land taxes
School or tertiary study fees
Health, car and household insurance
Transport costs – for example, public transport, petrol and tolls
Food and grocery items
Credit card and personal loan repayments

Irregular expenses to include in your family budget

Eating out and takeaway food
Home maintenance and household goods
School uniforms, textbooks and stationery
Medical and dental fees
Car repairs
Personal items like clothing and haircuts
Registration fees and equipment – for example, sports, music or dance programs
Holidays
Entertainment
Gifts – for example, for birthdays, weddings and other celebrations
Other things like special treats for you and your family

Depending on circumstances, you might have more expenses to add to these lists. Make sure you include everything you spend money on.

How to make a savings plan

Your budget will tell you whether you’re spending more or less than you earn. If you’re spending less than you earn, you can look at how to save and how to use your savings.

Tips for a savings plan

Review your spending. Figure out whether you’re saving as much as you can. Could you spend less on certain items? Do you have any high-interest credit cards or other loans? Could you pay these off and look into more suitable credit or loan options? It’s a good idea to do this regularly.
Build a savings buffer. Before you start saving for your wants, it’s important to keep extra savings for financial emergencies. For example, you could aim to keep some money in a separate savings account for emergencies. It’s a good idea to keep about 3 months’ worth of expenses.
Decide what you’re saving for. What are your goals? What do you want to save for in the next 2 years, 5 years and beyond? How much do you need to save to achieve these goals?
Set deadlines for your savings goals. Give yourself plenty of time – saving can seem to take forever. But be realistic, and you’ll avoid feeling pressure.
Open a fee-free bank account, which is separate from your main account. You can use this account only for saving towards your goals. You can set up a direct debit from your main account to regularly transfer a set savings amount.
Look into other options, like asking your employer to split your salary payment, so some of it goes into your separate savings account.
Speak to your bank, financial institution or financial adviser if you want more advice.

Once you’ve come up with a savings plan, it’s a good idea to review the pros and cons before you put it into action. This way you’ll know how it might affect your family life. If there are parts of your plan you’re unsure about, seek advice or double-check your calculations before you go ahead.

If you already have a savings plan that’s working well, you might consider adding to your superannuation or investing some of your savings into high-interest bank accounts or term deposits, shares or property. Talk with a financial adviser about what investments suit your family best.

How to avoid or manage debt

What is debt?

If you’re spending more money than you earn, you’re in debt.

How to avoid debt

Budgeting well is the key to avoiding debt.

You can also avoid debt by taking care when you’re choosing and using financial products like loans, credit cards, payment services and so on.

These ideas might help:

Carefully read any terms and conditions before signing up to financial products and services. They might end up costing more than you think.
Avoid short-term, high-cost loans like payday loans or consumer leases on furniture and whitegoods.
Be careful of ‘Buy now, pay later’ services or store-issued credit cards. These often have additional fees, which can add up quickly.

What to do if you get into debt

Reassess the money you have coming in and the things you spend money on.
List all your debts.
Focus on clearing one debt at a time, starting with the smallest.

How to clear your debts

You’ll need to reduce expenses and save money. These tips can help:

Have a family meeting to discuss how you can reduce expenses.
Identify ‘wants’ that you can do without – for example, streaming services, holidays, eating out and new clothes.
Identify ‘needs’ that you can get more cheaply – for example, electricity, groceries, insurance and mortgages.
Increase income by finding new or additional paid employment.
Look into financial support. For example, utility companies and banks have financial hardship policies to help their customers.

Watch out for scams. Avoid signing up to anything you don’t understand, and always ask someone you trust for a second opinion. If it sounds too good to be true, it probably is.

Where to get help with money problems

Financial advisers

Financial advisers can help you set saving goals and plan your future finances. A good financial adviser takes your family’s unique circumstances into account to help you achieve your financial goals.

You’ll need to pay to see a financial adviser. The benefits of financial advice often end up outweighing the cost.

Financial counsellors

Financial counsellors can help you when you have financial difficulties.

You can speak to a financial counsellor by calling the National Debt Helpline on 1800 007 007. You can also look for a financial counsellor in your area using the National Debt Helpline – Find a financial counsellor map.

Financial counsellors are always free.

These services can get you started:

Specialist financial counselling services

If you have special financial needs, these services can help:

Mob Strong Debt Helpline is a legal advice and financial counselling service for Aboriginal and Torres Strait Islander peoples – call 1800 808 488.
Small Business Debt Helpline is a service for small business owners experiencing financial difficulty – call 1800 413 828.
The Rural Financial Counselling Service is a program for eligible farmers, fishers, foresters and related small business owners experiencing or at risk of experiencing financial difficulty – call 1300 771 741.

Budgeting tools

These online tools and guides can help you get on top of your family budget, keep track of your spending, and plan for your family’s future:

Many financial institutions have their own free apps, resources and guides to help you with budgeting and managing your money. It’s worth looking at your institution’s website to find out what it offers.