Master your monthly budget

The new year is the perfect opportunity to take charge of your finances and start fresh with a monthly budget. Not only does a budget help you manage your spending, but it also supports you in reaching your financial goals. Plus, having a clear grasp of your finances can boost your confidence in making informed financial decisions. 

Never done one before? No worries, here’s a cheat sheet to get you started 

Calculate your income 

First things first, let’s work out your total monthly income. This includes your salary, side hustle, freelance work, and any other sources of income. Make sure to calculate your net income (after taxes) for a more accurate budget.

• Employees: You can find your net salary information on your payslips.
• Business owners: Use accounting software like Xero, QuickBooks, or MYOB. And if you need help, don’t hesitate to speak to your accountant—they love talking numbers!  

List your expenses 

Now it’s time to dive into your bank account and get clear on what your expenses are. This is usually when you discover you have an old subscription or membership ticking over each month that you no longer need or are overpaying on.  

• Fixed expenses: These are consistent every month, such as rent or mortgage, insurance, loan payments, and subscriptions.
• Variable expenses: These fluctuate each month, such as groceries, utilities, transportation, entertainment, and dining out. 

Set a savings goal

By now, you should have a clear picture of how much money is coming in and going out of your bank account, along with some potential savings from cutting back on expenses. Now it’s time to figure out how much you’d like to save each month. This could be for an emergency fund, a holiday, a wedding, or any other financial goals you have. Allocate and automate a portion of your income toward these savings goals.  

Set a reminder and check in 

At the end of each month, take some time to sit down and review your budget and spending. Compare your actual expenses with your budgeted amounts and look for any discrepancies. Adjust your budget for the next month based on your findings. Here are some key areas to keep track of: 

• Income: Monitor your sources of income and any changes, including overtime or unpaid leave. 
• Fixed expenses: Keep an eye on these to ensure they remain consistent. 
• Variable expenses: Track your spending in each category and adjust if you’re overspending. Came in under budget? Top up your savings and get ahead on your goal. 
• Savings: Regularly check your progress toward your savings goals and celebrate hitting your savings milestones. 
• Debt repayment: Track how much you’re paying toward any debts and aim to reduce them steadily. 

Tips for success 

• Use budgeting tools: Use apps or spreadsheets to help track your expenses and manage your budget. 
• Stay flexible: Be prepared to adjust as your financial situation changes. 
• Just start: don’t put pressure on yourself to have your finances sorted day one! Just creating a budget is a great first step.  

Next thing you know you’ll be mastering your monthly budget and kicking your financial goals.