How to Make a Budget!
Budgets are one of those boring things adults talk about, that may seem like a way to limit you spending your money on pub nights and clothes.
For most students, being at university is probably the first time that you are solely responsible for all the bills. This can seem super daunting, so that is where a budget comes in! Budgets are important, especially if you don’t want to be eating Mi Goreng every night of the week. Although they can seem hard and maybe even like way too much work, I promise they actually aren’t. To prove it, we’ve broken down making a budget into five easy steps. So keep reading and master your budget whilst you’re at UNE!
Step 1: Track It!
To start with you have to decide how you will keep track of your budget. There are so many options these days, nice and low tech like a spreadsheet. Follow the link for a great spreadsheet ready for you to just fill in your information (https://bit.ly/1AKrIoh). Or something more high-tech like an app!
There are heaps of budget apps out there, so we thought we’d make it even easier and do the research for you.
• Pocketbook – This app is Australian and free!
It simply syncs to your bank account and categorises each time you spend. It shows you exactly where your money is going, and you can set an allowance for each category like food or bills.
• Goodbudget – free again!
It is based on the envelope system. That is, storing your money in separate envelopes for separate expenses. You can then easily see how much money you have left to spend on new shoes, and how much you have left for groceries
• You Need A Budget (YNAB) – Free trial for 30 days, then a yearly fee of $118.
This uses the zero-based budget approach. You assign each dollar a job. It allows you to set goals, reports your spending, and makes it easy if you accidentally overspend. The downside to this one is the cost and it doesn’t sync to Australian banks just yet!
• Wally – another free app!
You can keep track of cash and card spending. More basic than most, but sometimes that’s just what you want
Step 2: Figure out Your Income!
You need to know how much you have available to spend before you make a budget. Base this on your after-tax income, this is the amount that actually gets deposited into your bank. Also remember to include any money you get from Centrelink, allowance from your family and scholarship money. Casual work can be hard, so try to estimate the average you are usually paid. It is better to use the minimum amount here, so your budget can work even in the slower weeks.
Step 3: Work out Your Current Expenses and Spending
This is where it can get a little scary! In this section, you need to include your steady bills, and the random expenses you’ve been making. This is where I realised I spent a lot of money on groceries each week, and yet somehow even more money on takeaway. Remember though, a budget is a great first step! Don’t beat yourself up about past spending, aim to do better in the future. Check your bank transactions over the last couple of months to identify what you have been spending your money on.
It can be easier to break these expenses up into categories.
Living expenses and essentials. For example:
- Travel (Fuel, bus or train fare)
- Mobile phone
- Insurances – health, car, home and contents
- Pet food
- Debt Repayment
- Take away and coffee dates
- Cinema nights
- New clothes
- Pub nights
This is the section you need to cut down spending on if you don’t have enough money.
Some people like to put away a set amount each week, e.g. $50, or a percentage of their income each week e.g. 10%
Step 4: Balance Your Budget and Set Your Goals
Now is when you work out how much money is left over after you’ve paid off your needs. That money can be allocated to wants and savings. This is where the spreadsheet or apps come into play. Use them so you can remember how much money you’ve allocated where.
Although it can be tempting to say you’ll ditch all the wants and just save, everyone deserves to treat themselves! Especially when you’re working hard at university, sometimes you need some retail therapy or just a donut, a little treat to eliminate stress. 😉
When thinking about savings, decide what you want to achieve with your money? I know sometimes it’s just being able to buy take away once in a while. But it could also be saving for an overseas holiday, paying off that credit card or building an emergency fund.
You can also set short, medium, and long-term goals. It helps if you write down what your goals are and determine a realistic time frame for each. Now that you have a goal deadline, estimate how much money you need to achieve the goal. Then determine how much money per pay that you need to put towards them.
Saving for big goals can seem hard but think about your daily spending. Buying lunch at work every day for $10 a day doesn’t seem like much, but over a year that adds up to around $2,600! Add in that daily cup of $3 coffee and you could be saving another $1,000 just by making one at home.
Step 5: Track Your Progress, Re-Evaluate and Make Adjustments
At the end of the day, your budget will only work if you are actually using it! Try your best to stick with it. Remember to keep logging your expenses or checking in to the apps if they are doing it for you. We recommend a 5 to 10-minute check in once a week, to begin with. Write it in your diaries, start making that habit. Use your system (read: app or spreadsheet) to tell you where your money should be going. Also, consider setting up an automatic bank transfer every payday. Then you don’t have all your money sitting in your everyday account.
One of the biggest mistakes is overspending and just giving up. Keep going! Look at why you overspent, can you move some money around? Budgets are continuously changing, just as our needs are changing. It may take some time to get it all right, but that is ok!
Keep striving to reach those goals! If you stumble, get back up. You can do this!!
If you ever need a little extra help contact us at Advocacy & Welfare and we’ll give you a hand.