Budgeting - Where does all my money go?
If you have a limited income, making a budget and keeping track of your money makes sense. The less money you have to live on, the greater the need to budget. It sounds boring, but it can save a lot of hassle, because you’ll know when the bills are due and what you need to put aside to cope with big expenses (like textbooks at the beginning of each session). Budgeting means planning ahead so that you don’t feel overwhelmed or panicked every time you get a bill. It means being in control of your money, rather than letting it control your choices.
Getting the Balance Right
Balancing your budget means checking that you have enough income to pay for your expenses. Sometimes you will have to do one of two things to balance the budget: either reduce your expenses so that they are less than your income, or increase your income so you have enough money to pay for your expenses. The first steps in budgeting are to:
- Add up all your sources of income and work out your net (after deductions) income
- Add up all your expenses. When adding up your expenses, you need to remember to include all the little things (such as snacks, magazines, and grocery items you pick up every few days), as well as irregular things (like insurance, gym membership, or car services).
The next step is to put all this information into budget sheets that you check and revise periodically (e.g. once a month). You can do this a number of ways:
- Download the PDF budget sheets below and fill them in (may be a good idea to use pencil!)
- Set up your own sheets tailored to your personal circumstances, either in a notebook or on computer. Excel and Lotus are both good spreadsheet programs for setting up sums and other formulas, and for updating information when income or expenses change. An Excel spreadsheet, based on the budget sheets has been set up for you to use as a starting point see the related documents below
- Use an online budget calculator. Wesley Mission’s Credit Line Financial Counselling Service has an online ‘Money Planner’ – go to www.wesleymission.org.au/centres/creditline/plan.asp and scroll down
- The Commonwealth Bank also has an interactive Student Budget Calculator at: www.commbank.com.au/personal/other/useful_tools.asp Note that it has no specific category for grocery expenditure so you will need to include this in the "others" or "household items" section.
Set up your own sheets, either on paper or on computer. An Excel spreadsheet with formulas has been set up in the online version of Dollars & Sense for you to use as a starting point.
Expenditure Planner
An expenditure planner can be useful for monitoring high and low expenditure months. Use it in conjunction with your budget sheets.
A sample planner can be found below, in two versions. You can use the PDF version as it is, or adapt the Excel version to your own needs by adding/deleting rows.
Related Documents
- Budget Sheets (PDF) [Acrobat Document: 70Kb]
- Budget Spreadsheet (Excel) [MS Excel Document: 29Kb]
- Yearly Expenditure Planner (PDF) [Acrobat Document: 31Kb]
- Yearly Expenditure Planner (Excel) [MS Excel Document: 16Kb]
Budgeting Tips
- Keep the money needed for fixed expenses (i.e., regular bills) in a separate bank account and don’t touch it for anything else
- Try to save even a small amount every week – it all adds up. $10 a week over a year will give you $520 to pay for a holiday or Christmas presents. Try to put some money aside in case of unexpected medical or dental expenses
- Before making purchases, think in terms of your needs and wants. Is it something you can do without? Can you get it another time? You need to be realistic!
- Keep receipts for all purchases and money transactions to check against your bank statements
- Be aware of (and avoid if possible) the things that blow out the budget, such as a car, smoking, take-away food, alcohol and impulse buying
- Try to avoid having a credit card, as they create a debt that is very difficult to eradicate
- If your budget shows you’re on your way to serious debt, you may need to take drastic action on ‘big-ticket’ items: move to cheaper accommodation, get rid of the car.
Remember these steps will be temporary – you won’t be a poor student forever!