Set yourself up for success with a household budget
Our handy household budget guide will give you tips, inspiration and good food-for-thought about setting yourself up for success with a your very own household budget.
Budgeting, depending on whether you’re a seasoned pro, or new to it – can be fun and give you a great understanding of your personal finances.
Budgeting isn't that hard, and it can even be fun if you approach it in the right way.
The trap people fall into when setting household budgets is going in with pre-determined financial goals is they focus on goals before they know if they can achieve them.
This is a problem because it can lead to disappointment and discouragement. Instead, the first step should be to assess your current situation and make sure that you have the skills, tools, and resources needed to achieve your desired goal.
It's important to have a plan in place first before you start trying to figure out what your goals are going to be.
What is the best household budget?
There are many different types of household budgets, but one of the best ones is the zero-sum budget which means that every dollar that comes in has to go back out again, in some format - whether it goes to some kind of saving or mortgage offset or paying down debt. This type of budgeting is great for planning for expenses and savings because it forces you to plan for all your expenses and savings before anything else happens.
Goals may be why you start but they shouldn't be where you start
When you start budgeting, it may be from the desire to build up your savings, or pay down some debt quicker, or just have more money on hand more often – and less of a ‘boom / bust’ cycle of income and spare cash.
While those goals and desires are important, something people setting out to start or re-start a personal or household budget often get wrong is by starting with goals and trying to shoe-horn how they can achieve them.
And don’t get us wrong, goals are good to have – you should have some and you should want to find ways to achieve them. But if you don’t currently know how you’re spending your income, and what you’re spending it on, it can often be harder than it needs to be to have fun making, setting and keeping a household budget.
It's better to take the time to jot down how your income is currently spent to know
1. Where your money is currently going.
2. Optimisation. Can savings be made by finding cheaper providers for the same service? What compromises do you have to make to do that? What savings, deals, alternatives are available?
3. What's going to get the chop? What could be cut out from current spending entirely? (such as cutting one or more streaming or package delivery subscriptions) Some people cut out eating meat, or significantly reducing it to save on food, to help pay for bills and other household necessities.
After this is done - then you can start with goals for things such as saving for a holiday, or investments or health. By knowing where you spend today it is much easier to know how you're going to achieve whatever goals you choose to go for.
Guides for setting budgets
The Australian government websites are a great place to start your budgeting journey:
https://moneysmart.gov.au/budgeting/budget-planner
https://www.servicesaustralia.gov.au/how-to-budget?context=60271#simplemoney
Jessica Irvine, a columnist with Nine Fairfax (at the time of writing) provides free budgeting guides on her website:
https://www.jessicairvine.com.au/resources/
And a HelpPay user has also provided their budget spreadsheet which you can download a copy of, when you login to Google Drive:
https://docs.google.com/spreadsheets/d/15AuA7i_eSI9JXmSzn_IGv4Jv7pGCteMSzuwHG2yjka0/edit?usp=sharing
We particularly like the HelpPay users budget as it makes it easy to enable a monthly, quarterly, six-monthly, and whole year view of a household budget - which is invluable for getting out of the boom bust cycle of spending and saving.
The final word
Budgeting is a great way to set yourself up for success at any age. No matter if you're starting out in life or starting over at some point in life - knowing how you're spending, giving you the control to make great decisions for yourself is one of the most important things you can do for yourself.
Knowing whether you should or could spend or save something, or knowing that by going a little bit over budget now means you can choose to save a bit more later - it's all about giving you control and a visualisation of your money so you can make those decisions in an informed way.
Happy budgeting!
About HelpPay
HelpPay is a 100%Australian owned company focused on making helping easier.
HelpPay's app is free for anyone to download and the HelpPay Promise ensures that money received to be paid towards a bill only ever goes to pay that bill.
Best of all the HelpPay app keeps a track of how much has been paid so when the full amount owed has been paid it stops accepting payments, providing peace of mind that bills can't be overpaid.
Download the HelpPay app from the Apple Store or Google Play Store or use the web version of HelpPay, today.
