How to Budget

Why Budgeting Is Your Best Friend (Yes, Really!) 

If you’ve ever thought, “Budgeting is too hard” or “It’s too restrictive,” you’re not alone. Lots of people struggle with budgeting because they think it means they won’t be able to do the things they enjoy anymore. But budgeting isn’t about saying no to the things you love. It’s about saying yes to the things that matter most. 

A well-thought-out budget helps you: 

• Track your spending so you know where your money is going. 

• Plan for your future, whether it’s saving for a big goal or simply having an emergency fund for unexpected events. 

• Make informed decisions—you’ll no longer be stuck wondering if you can afford something. 

When done right, a budget gives you more control and flexibility, not less. 

Step 1: Understand Your Income 

The first step to creating a budget that works is knowing how much money you have to work with. Start by calculating your net income—that’s your total earnings after tax and any other deductions (like super or health insurance). If you’re unsure, check your payslip or bank statements. 

If you have extra sources of income, like a side hustle or government payments, make sure to include those too. 

Step 2: List Your Expenses 

Next, it’s time to figure out where your money is going. Start by listing your fixed expenses—the things you have to pay every month, like: 

• Rent or mortgage 

• Utilities 

• Loan repayments 

• Insurance 

• Subscriptions (Netflix, gym memberships, etc.) 

Then, jot down your variable expenses—things that change from month to month: 

• Groceries 

• Eating out 

• Entertainment 

• Transportation 

Finally, include your occasional expenses—the ones that pop up now and again, like gifts or car servicing. If you’re not sure about the exact amounts, take a look at your bank transactions over the last few months to get a clear picture. 

Step 3: Align Your Budget with Your Values 

A budget isn’t just about numbers; it’s about making sure your spending reflects what’s most important to you. Ask yourself: 

• What do I value most in life? (Is it experiences, like travel or eating out with friends? Is it security, like building an emergency fund or saving for a home?) 

• Am I spending my money in a way that aligns with those values? 

If you find that a big chunk of your budget is going towards things that don’t bring you happiness or fulfilment, it might be time to shift things around. This could mean cutting back on areas that don’t matter as much to you and reinvesting that money in things that do. 

For example, if travel is your passion, consider reducing your takeaway coffees or subscriptions, and start a travel fund instead. You get to decide where your hard-earned money goes and make your budget work for your lifestyle, not the other way around. 

Step 4: Set Realistic Goals 

Once you’ve reviewed your income and expenses, it’s time to set some goals. These could be short-term, like paying off a credit card, or long-term, like saving for a house deposit. Be specific and realistic with your goals. Instead of saying, “I want to save more,” try “I want to save $1,000 for an emergency fund in the next 3 months.” 

Breaking your goals down into smaller, manageable steps makes them feel more achievable. And don’t forget to celebrate your wins along the way! 

Step 5: Track and Adjust 

The key to a successful budget is flexibility. Life happens, and sometimes things don’t go according to plan. The important thing is to keep track of your spending and adjust where needed. 

Try using an app or a simple spreadsheet to stay on top of your expenses. Set aside a little time each week to review your progress, and if something isn’t working, tweak your budget to suit. Maybe you need to increase your grocery allowance or cut back on dining out—whatever the case, remember that budgeting is a work in progress. 

Tips to Make Your Budget Stick 

• Automate your savings: Set up automatic transfers into your savings account so you’re building your fund without even thinking about it. 

• Create a buffer: Add a small buffer to your budget for unexpected expenses, so you’re not caught off guard. 

• Stay flexible: A budget isn’t set in stone—adjust it as your financial situation and priorities change. 

The Bottom Line 

Budgeting doesn’t have to be stressful or restrictive. In fact, when done right, it gives you more freedom to focus on the things that really matter to you. By following these simple steps and keeping your budget aligned with your values, you’ll have a roadmap to achieving your financial goals—without missing out on what you love. 

At Fair Go Finance, we’re all about helping you take control of your finances and make smarter money decisions. Whether you need a personal loan to get ahead or some advice on your next steps, we’re here to help you on your financial journey. Ready to take control? Let’s get started today! 

Disclaimer

^{The content provided in this article is intended for general informational purposes only. It is not intended to serve as medical, financial, or professional advice. The tips and advice shared are based on general knowledge and are not tailored to the specific circumstances of any individual reader. Always seek professional advice with any questions you may have regarding your health, mental wellbeing, or financial situation.}