Whether you’re hoping to buy a home this year or are tired of wondering where your pay packet goes, budget planning can help you out.

With these handy steps you’ll be able to work out where your money is going and save some extra dollars for a rainy day.


1. Keep track
The best way to work out where you’re spending your money is to keep a record of where it’s going. Collect all your receipts for at least a week and keep track of them using an app like the MoneySmart TrackMySPEND. You’ll be more conscious of what you’re buying and you’ll see exactly where your money goes.

2. Categorise your payments
Once you have a record of everything you buy, put the different types of purchases into categories so you can see where you spend the most. For example, household expenses like electricity and gas will go in one column, while groceries will be in another.  A budget planner calculator is a great tool to help you categorise your expenses – You can use Go Mortgage’s calculator or even MoneySmart’s as well.

3. Set a goal
With all your expenses in different categories, add your income so you can see where you spend your money and how much is left over at the end of each pay period. Now set yourself a goal, such as saving for a holiday, a deposit for your first home, or paying off some of your existing home loan. Work out how much money you’d like to save for your goal in a year and then divide by 12 to determine what you need to save each month. If your current savings covers it then you’re on track. If not, you’ll need to look at your categories and work out where you can spend less. Perhaps you can pack lunch each day rather than buying it – how much would that save? Now adjust your budget for this change and see what a difference it makes.

4. Automate your budget
Once you’ve set your budget, put in place ways to help you manage it. For example, if you always forget to pay your credit card bill and end up paying interest, consider whether to set up a direct debit to make your credit card payments on time. You may also consider setting up automatic regular withdrawals to a separate savings account.

5. Track your progress
Your budget should be a living document, so make sure you check it each month to see if you’re on track. If you’re having trouble sticking to the plan then take another look at where each cent goes and see where you can shave off some expenses.

By following these tips, you can really take control of your money and get closer to achieving your goals.