Budgeting. That word can make anyone feel a bit uneasy. But let’s face it, whether you’re just starting out or settling down in Australia, learning how to create and stick to a budget is a skill that can make a world of difference in your life. I know because I’ve been there. And I wasn’t always great at it—even with a background in finance! When my husband and I moved to Australia, budgeting was something we had to learn the hard way. I want to share our story and break down the simple steps we followed to build a budget that worked, and ultimately helped us thrive.
There’s something very real and raw about finding yourself in a situation where your finances are tighter than you ever expected. That moment came for us when we were both out of work. No income, no safety net, and a whole lot of uncertainty. We were backed into a corner, but instead of letting it crush us, it pushed us to take control of our finances. We sat down at our kitchen table and laid everything out: What do we have? What do we owe? And, most importantly, how do we make this work? That conversation was the beginning of our journey to financial stability.
Now, I’m not saying we had it all figured out right away. Budgeting can be daunting, but by breaking it down into five easy steps, we learned how to manage our money effectively. Whether you’re going through a tough time or just want to get a better handle on your finances, these steps can help you too. Let me walk you through how we did it.
1. Calculate Your Total Income (Per Fortnight or Month)
The first step to creating any budget is to figure out your total income. This is your take-home pay after taxes and deductions. Since we got paid fortnightly, we calculated our income for every two weeks. But you can easily adjust this to work with a monthly income if that’s how you’re paid. Gather everything: your full-time salary, any side jobs, and government benefits (such as Centrelink).
For us, this step was pretty straightforward. My husband was the only one working at the time, so we simply wrote down his fortnightly pay. If you have multiple sources of income, be sure to include them all. Every dollar counts when you’re creating a budget.
2. List All Your Expenses
Now, this is where things start to get real. It’s easy to overlook certain expenses, but trust me, this step is crucial. Start by listing every single expense you can think of. We broke our expenses down by categories and when they were due. For us, our budget included the following:
- Mortgage
- Grocery
- School fees
- Life Insurance
- Car Insurance
- Home and Contents Insurance
- Car Rego
- Car Service
- Extra-Curricular Activities
- Internet
- Health Insurance
- Petrol
- Electricity
- Gas
- Water
- Council Rates
- Donations
- Investments
- Savings
Yes, even investments and savings made it onto our list! It might sound strange, but we wanted to be sure that every dollar had a purpose, even if that meant investing a small amount or setting aside money for savings. The key here is accountability. When every dollar is accounted for, you’re less likely to overspend in areas that aren’t essential.
3. Subtract Your Expenses from Your Income to Equal Zero
This is where budgeting becomes a balancing act. Once you’ve written down your income and all your expenses, the goal is to make sure they balance out to zero. This method is called zero-based budgeting. It means you’re assigning every dollar a job—whether it’s paying for groceries, covering bills, or contributing to savings. By the time you’re done, your income minus your expenses should equal zero.
Here’s a simplified version of how it worked for us:
| Total Income | $ 5,000.00 | |
| Total Expenses | ||
| Mortgage | $ 2,000.00 | |
| Grocery | $ 500.00 | |
| School fees | $ 200.00 | |
| Life Insurance | $ 400.00 | |
| Car Insurance | $ 70.00 | |
| Home and Contents Insurance | $ 70.00 | |
| Car Rego | $ 70.00 | |
| Car Service | $ 70.00 | |
| Extra-Curricular Activities | $ 200.00 | |
| Mobile Plan | $ 50.00 | |
| Internet | $ 75.00 | |
| Health Insurance | $ 280.00 | |
| Petrol | $ 300.00 | |
| Electricity | $ 100.00 | |
| Gas | $ 100.00 | |
| Water | $ 100.00 | |
| Council Rates | $ 200.00 | |
| Donations | $ 50.00 | |
| Investments | $ 150.00 | |
| Savings | $ 15.00 | $ 5,000.00 |
| Total | $ – |
If your expenses exceed your income, it’s time to trim some fat. For us, that often meant cutting down on groceries or finding ways to save on utility bills. On the other hand, if you end up with a surplus, decide where that extra money should go—towards savings, paying off debt, or even investing. The goal is to give every dollar a purpose, so nothing goes to waste.
4. Monitor Your Spending Throughout the Month
Creating a budget is one thing. Sticking to it? That’s a whole different challenge. It’s easy to create a plan, but staying disciplined requires a bit more effort. To keep ourselves on track, we monitored our spending regularly. Every dollar spent had to come from the right budget category.
For example, we made sure that our grocery money was only spent on groceries. If we wanted to buy something outside of our budget, we’d sit down and decide if it was really necessary or if it could wait. This habit of monitoring our spending kept us in check and helped us avoid those little, sneaky expenses that can throw a budget off balance.
Think of your budget as permission to spend. It’s not about depriving yourself—it’s about spending intentionally and within your means. If something doesn’t fit within your budget, you have to ask yourself, “Do I really need this right now?”
5. Adjust Your Budget When Necessary
Here’s the truth: Life is unpredictable, and your budget needs to be flexible. Just because you set a budget doesn’t mean it’s set in stone. We would reassess our budget every fortnight when my husband got paid. Sometimes, his income would be higher due to leave loading or a bonus. Other times, unexpected expenses would pop up.
In those moments, we would make adjustments. Maybe we’d add a little more to savings when there was extra income, or maybe we’d cut back in other areas if we had more expenses than we anticipated. The important thing is to stay flexible and make changes when necessary, rather than ignoring the issue and hoping it works itself out.
Conclusion: Stay Confident and Keep Moving Forward
And that’s it—five simple steps that helped us take control of our finances and achieve our goals, like building an emergency fund and saving for a house deposit. Budgeting can feel overwhelming at first, but the more you do it, the easier it becomes. It’s all about creating a routine and sticking with it.
Don’t be discouraged if you slip up. Some months will be harder than others, and that’s okay. What’s important is that you keep going, learn from your mistakes, and get better each time. Remember, this is a team effort, especially if you’re budgeting with a partner. Working together to manage your money not only helps you achieve your financial goals but also strengthens your relationship.
So go ahead—grab a pen and paper (or a budgeting app) and start your journey to financial freedom. You’ll be surprised at how empowering it feels to be in control of your money!
