Knowledge14 budgeting tips to save you time & money

Tips and tricks to help you create a budget and stick to it to meet your savings goals.

A budget is a spending plan which helps you understand your real financial position, so you’re not spending more than you’re earning.  A budget breaks down your income vs expenses so you can manage your finances

Budgeting has several benefits

  • Budgeting is for everyone.If you don’t budget, how else will you be able to work out all of your expenses?  And don’t be intimidated – doing a simple budget is easy!
  • Meet your savings goals quicker.A budget can help you achieve your savings goal faster – by showing you where you may be able to minimise expenses.
  • Get a real picture of your finances.A lot of people think they’re spending wisely only to realise that they have a long way to go to get on top of their spending.
  • Keep improving your spending.Once you get used to following a budget, it’ll become easier and you’ll continue your good savings habits naturally.

Our Top 14 budget tips

  1. Set achievable goals
    If you don’t set goals that are achievable, you’re setting yourself up for failure.
    You need to set realistic goals.
    Don’t plan on cutting your budget by 80% unless you actually think it’s possible. The money has to come from somewhere.
    You need to stick with it.
    A lot of people budget carefully until they’re out of debt and then figure they can go right back to their old ways. If circumstances change, adjust your budget rather than throwing it out entirely. Whether you’re paying off student loans, building up an emergency fund or saving for a house, you need to focus on your why. What’s the reason you’re making these sacrifices?  When things get hard, remind yourself of the WHY.
  2. Analyse your past spending for quick wins
    Take a look at your spending habits over the last few months. You can do this by looking at your transaction history in your mobile banking app or Internet banking. Try to group your spending into categories such as groceries, then you should be able to see where you’re overspending.   The truth is that having a budget doesn’t mean you need to cut out “bad” spending. Instead, you should simply budget for it. Set yourself a daily, weekly or monthly allowance for certain expenses and then stick to it.
  3. Use the Bucket Approach
    Follow the Barefoot Investors strategy of dividing your income into ‘buckets’:
    GROW – up to 10% in superannuation or to build long term wealth
    BLOW – 60% daily expenses (and a bit of short term ‘splurge’ money)
    SAVE – 30% Safety/emergency money, medium term savings goals (holidays, uni fees)
    Have a separate bank account for Blow and Save  (and Grow), then budget on how to survive on your ‘Blow’ amount.  Don’t forget to allocate some money to “GIVE” if you can afford it.  If you can’t donate money to a worthy cause, then consider donating your time instead.  And don’t worry, the percentage split is just a guide.  Read more at: Barefoot Investor
  4. Make sure your money is earning lots of interest
    If you’ve got a savings account, look up what interest rate it’s currently paying (it’ll say this in your banking app or via Internet banking). By switching to a high interest savings account you could be earning more interest on every dollar you save. This can really add up over an entire year, and you could be hundreds of Kina better off (depending on your
  5. Get a budgeting buddy
    If you’re having trouble keeping your spending in check, call in a friend or budget buddy.  Budgeting is easier with a support system. It could be a partner, friend or family member, They can help keep you on track if you find yourself backsliding or overspending, so don’t underestimate the power of moral support.
  6. Budget together.
    If you’re married, sit down once a month and have a budget night.  Make it fun! Grab some of your favorite snacks and put on a good tune to help you focus.
    You need to get on the same page with money, so set goals together and dream about what the future will look like. And if you’re single, find someone who can act as your accountability partner and help you stick to your goals!
  7. Use cash
    If you struggle to stick to your budget because tapping your debit or credit card is just so easy, keep spending simple with cold hard cash. No credit, no fees and no way to spend more than you have. Set aside a certain amount of money each week and withdraw enough cash to see you through.  Lots of people like the ‘envelope’ system where you allocate an envelope (and put your budgeted cash inside) for each type of expense.  Once you’ve spent it – it’s gone – you’ll have to wait until your next budget period to top them up!
  8. Save your coins
    Each day, empty your coins into a jar (make sure to keep it somewhere safe).  At the end of each month, deposit into your savings bank account.  You’ll be surprised just how much you can save!
  9. Adjust your goals if you don’t meet them
    If you didn’t meet your budget goals, don’t panic – it’s okay to make changes. This is not cheating, and is in fact a normal part of keeping a budget. Your spending needs and financial situation will naturally evolve and your budget needs to keep up. Making changes is a learning opportunity, and a chance to look at your expenses in a different light.
  10. Pay off your debt.
    Pay off your highest interest debt first.  Consolidate or refinance if possible to ensure the lowest interest rate you can access.  And DON’T over borrow – you still need to live and have enough for day-to-day living expenses.
  11. Create a buffer in your budget. (The SAVE bucket)
    Put a small amount of money aside for unexpected expenses throughout the month. That way when something comes up, you can cover it without taking away money you’ve already put somewhere else. Keep track of expenses that frequently end up in this category. Eventually, you might even want to promote them to a permanent spot on the budget.
  12. Be content and quit the comparisons.
    Don’t compare your situation to anyone else’s. Keep moving forward and doing what’s right for you and your family.
  13. Give yourself lots of grace.
    It usually takes three to four months to get a handle on this whole budgeting thing. It won’t be perfect the first time, or the second. But you’ll get there!
  14. Educate yourself
    Keep learning and educating yourself on money tips and tricks, how to budget, financial wellness, budgeting as a family etc.  Utilise our free Moni Savi resources or see if your employer is interested in supporting a more formal financial literacy course (our family money matters course).
    Don’t think of your budget as a necessary evil or a chore, but instead as a powerful ally in the fight for savings. If you haven’t already created a budget and aren’t doing anything else at the moment, start now.  Download this great budget spreadsheet by moneysmart.