The cost of living in general has changed considerably over the last twelve months and Australians are feeling more financially stressed than they have for some time. When the economy puts more pressure on people and it’s time to tighten the purse strings, having better control of your money has a significant impact on your peace of mind.
You can achieve this by having more visibility and transparency of money coming in, and money going out of your household. We don’t want you to succumb to financial stress, we want you to get on top of it and in many cases, making more money isn’t the only answer to cashflow problems. Creating a household budget and sticking to it and living within your means is more often the answer to reducing financial stress and worry.
Taking control of your budget can feel a little overwhelming so we’ve provided insights into budgeting and managing expenses. When your money situation is transparent, you feel more in control, and more able to make smarter financial decisions. If you need assistance with developing a household budget, please talk to us here at Colledges, we’re here to help.
Preparing the household budget
Every household has fixed and variable expenses with the occasional unexpected expenses that come along each month. By having visibility to your fixed and variable expenses, you can plan for those unexpected bills with more ease and less worry.
List your fixed expenses:
- Rent or mortgage payments
- Utilities – electricity, gas
- Mobile, phone and internet
- Council rates, body corporate fees
- Insurances – medical, health, car, home
- Travel and transport – vehicle rego, fuel, public transport fees
- Childcare or child support
- Other
List your variable expenses:
- Groceries
- Clothing
- Car repairs
- School costs
- Medical expenses
- Pet expenses
- Other
List your discretionary expenses:
- Streaming services – Netflix, Stan, Prime. Spotify etc.
- Subscription services – online apps, magazines, gaming, news etc
- Charity donations
- Entertainment
- Gifts
- Hobbies
- Other
List your income:
This includes cash coming into your household from all sources such as:
- Salaries
- Dividends
- Rental income
- Centrelink allowance – pension, youth allowance, unemployment
- Superannuation pension
- Selling goods online
- Other
Related blog: Keeping records and tracking expenses to reduce tax and maximise income. Find out more below.
Tools online for household budgeting
There are many tools online now to track your household expenses. You can find some popular ones here: https://www.canstar.com.au/budgeting/budgeting-apps/
Or you can use a simple spreadsheet to track your budget.
Moneysmart also has a budget planner to help you:
https://moneysmart.gov.au/budgeting/budget-planner
Living by your household budget
Once you’ve gone to the effort to set up a household budget, the next step will be to ensure you stick to your budget as much as possible.
Unexpected expenses will come along for everyone, and its important to plan for these. But for the rest of the time, if your household budget is realistic, you can make ends meet and have some wiggle room.
Managing your household budget is much easier if you have a regular “budget check”. Review your income and expenses each week to keep track of how you’re handling your spending.
Transparency is key. The more you do this, the more you understand your spending patterns and the more control you will have over your money.
Set up accounts for different purposes
Banking apps give you the ability to easily set up accounts and automatically deposit funds into these accounts. Some banks charge no fees for setting up and managing an account and others offer special incentives.
Rather than having one or two accounts that all your money is managed from, we suggest you set up an account for various purposes. For example, you can set up an account for the following:
- Bills – gas, electricity, rates, rent, mortgage, maintenance
- Entertainment/travel/holidays
- Groceries
- Health, medical and wellbeing
- Education (if you have kids)
- Savings account
Setting up automatic fund transfers each time you get paid, so that each of these accounts is topped up weekly/fortnightly/monthly makes it easier. You’ll find these accounts will fill up with little effort on your behalf. It takes the stress out of coming up with funds for bills each month, and it also helps with unexpected bills. You’ll also find that you’ll develop new and better money habits, because you’ll feel more in control, you’ll see your accounts topped up with money each week which is encouraging, and you’ll be happier to live on what is in your daily account.
Should you have a credit card?
This is a personal choice and it’s fine to have a credit card as long as it’s paid off each month. Some clients like to use credit cards for points and others for the convenience of paying for unexpected items.
Please talk to us if you need further assistance and we can refer you to a financial advisor for more information.
Financial counselling service
If you are in financial distress, you don’t need to battle away on your own. There are financial counsellors available to help you through difficult times. Please talk to us here at Colledges and we’ll put you in touch with people who can help.
You can also find more information about financial counselling at Financial Counselling Australia.
Let the team at Colledges help you to boost your financial wellbeing
Yes, we do tax and compliance really well, but we also help people with their household budgets and cashflow management, so that you have money left over for savings, travel, hobbies or holidays.
Give us a call on (03) 9851 6500 or email us at hello@colledges.com.au.
