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Parents creating a budget on a laptop computer

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If your income allows, deliberately overestimating the money you need for bills might help you find extra spending money.
Different families handle budgeting and money management in different ways. But the general goal of money management is a yearly, monthly or weekly picture of what you need to spend and what you have left over.

Benefits of budgeting

Budgeting will help you:

  • spend your money on the things you really need
  • set aside money for unforeseen expenses
  • stop accidental overspending
  • save money for the things you dream about.

Having a plan for how to manage your money will help you and your family save money and avoid getting into debt. It can also help you get on with being a family, rather than spending too much time on financial stresses.

Working out how much money you need for everyday essentials like food, housing, utilities such as gas, electricity, phone and water, transport and medical services also helps you plan for unexpected expenses.

After you’ve accounted for the essentials, hopefully there is some money left over to buy some of the things you want, as well as to save for emergencies and your long-term goals.

The key is knowing how much ‘spare’ money you have, and only spending that.

Getting started with budgeting

One way to start is to make a table listing what you have and what you owe.

A long-term budget will also include:

  • average bills per month or week
  • your mortgage
  • what you pay on credit cards
  • any other debts
  • any other money you spend
  • bank accounts
  • superannuation statements.

Try to budget a specific amount for fun, leisure and personal expenses and then stick to it (which is usually the hard part!)

Read more about some simple tools for planning a budget. 

A plan for money management

Looking over previous bills can help you plan how to spend or save your income. You can then come up with estimates of what you spend a week, a month or even a year.

Here are some of the spending items that you might want to include in your family’s money management plan:

  • house repayments or rent
  • council fees and land taxes
  • food
  • utilities – gas, electricity, phone and water
  • home maintenance and household goods
  • school or tertiary study fees
  • medical and dental fees
  • credit card and personal loan repayments
  • health, car and household insurance
  • car repairs and petrol
  • public transport
  • personal items like clothing and haircuts
  • holidays
  • miscellaneous items such as gifts and special treats for you and your family
  • entertainment.

Keeping a simple savings plan means that you will be more likely to reach your goal (and buy that thing you really need).

  • Decide what you’re saving for. What are your goals? Give yourself plenty of time – saving can seem to take forever.
  • Think about how long it will take to reach the goals you’ve set. Be realistic and you will avoid feeling pressure.
  • Review the pros and cons beforehand so that you know what you’re getting into with your savings plan and what effect it will have on your life.

Speak to your bank or financial institution if you would like more advice. There might be other options that would help you, such as asking your employer to split your paycheck and put some of it into a separate low-cost, low-activity savings account.

If there are parts of your plan you are unsure about, seek advice or double-check the facts before you go ahead.

Video Expert tips on money management

In this video, financial expert Paul Clitheroe offers tips to help you handle the financial burden of raising children. The video also covers budgeting, planning, prioritising needs over wants, and making sacrifices to keep income greater or equal to expenses.
  • Last updated or reviewed 12-06-2014