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Writing a budget 101

Does the word ‘budget’ give you the sweats or make you wish you could bury your head in the sand? The good news is, you’re not alone. The better news is, with the proper tools, budgeting could be easier than you think.

What does ‘budget’ actually mean?

Think of a budget as a financial ‘go-to’ guide, designed just for you. Whether you’re saving for a particular goal (home loan anyone?), or simply want to track your spending, having a solid budget in place could help you make smarter financial decisions.

5 steps to successful budgeting:

1. Set your goals

By establishing your goals, you’ll have a clearer idea of why you’re creating a budget. Think about your short-term and long-term goals – that’s anything from planning a holiday to starting a family and buying your first home. If you know what you’re working towards, you’re more likely to follow through.


Pro tip: Writing down your goals and putting them in a visible place (like on your fridge) or changing your phone screen to an image of your dream, are great ways to help visualise where you want to be in the future.
 

2. Calculate your income

First, start by tallying up your total income – jobs, side hustle, all of it. Breaking down your income by pay cycle can be a great place to start your budget.


Pro tip: After an interest boost? Sign up for a
USaver savings and Ultra transaction account and you could unlock a 2.41% p.a. interest rate* to really make those dollars count.

* To get the bonus rate, you must deposit at least $200 a month into your USaver Ultra transaction or USaver savings account from a non-UBank account (for example, your salary). Also, the total balance of all your accounts must not exceed $200,000.
 

3. Work out your fixed and variable expenses

When it comes to your expenses, knowing where to start can be tough. So, keep it simple, and start with your fixed expenses. When you’re ready to tackle variable expenses, using bank statements can be a big help.

Fixed expenses:

  • Mortgage or rent payments
  • Loans (student/car/personal)
  • Insurance and health care
  • Education and childcare
  • Subscriptions (we love you Netflix and Spotify)
  • Internet and phone bills

Variable expenses:

  • Electricity and water bills
  • Groceries
  • Entertainment
  • Food & drinks (think eating out, happy hour, and food delivery – looking at you, Uber Eats)
  • Health and beauty
  • Transport (petrol/tolls/bus/train tickets/Uber/Taxi)

Pro tip: If you’re an iOS UBank customer, you’ll have access to our awesome in-app budgeting tool Free2Spend. If you pop in your income, expenses, and financial goals, it’ll give you one number to spend freely each day and help you hit your savings target – your pocket-sized budget buddy.
 

4. Set up a budget with realistic goals

You can have as many saving goals as you like but it’s important to know how much you need to save for each, your time frame and your most immediate savings goal.

Say you’re saving for a home loan. But you’d also like to go on holiday. By factoring both into your budget plan, you could jet off to sunnier shores this winter while still topping up that home loan fund in the background.


Pro tip: You can have up to 9 USaver accounts, all individually nicknamed to match your savings goals. You can even personalise each account with a photo – how cool is that?
 

5. Commitment time

Even if you’re on track and fully committed to your budget, it’s important to regularly check-in with your financial self. It can be great for motivation, acknowledging your successes and to address any areas of your budget that could do with a little TLC.


Pro tip: Be flexible with your budget – some months might be packed with events, holidays or moving-house costs, while others aren’t. By reviewing your budget regularly and factoring in any extra expenses can help, you can manage the impact these life events might have.


Having a budget in place doesn’t mean you have to give up your nights out or that morning coffee. Instead, it can help you find a balance between what you spend today and what goals you reach tomorrow.


The information contained in this article is of a general nature only. It doesn’t take account of any person’s objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate for your circumstances and seek independent legal, financial, and taxation advice.