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Budgeting for beginners [free budget planner]

Andrew Munro

How to use a budget planner properly and save money

Budgeting can be a scary word, but once you know how to budget properly it’s hard to imagine going back. Budgeting doesn’t mean scrimping and saving, but is instead just a plan for managing your money and expenses, which can include spending on entertainment, luxuries and more of life’s pleasures.

Once you learn how to budget and save, you’ll be able to spend money on luxuries without worry or guilt, and can manage your expenses more closely.

So, what is a budget?

A budget is simply a detailed description of what income is coming in and what money is going out, basically your savings and expenses.

A budget plan lets you see where your money is going, and gives you a clear picture of your saving and spending patterns. Whatever your financial goals, a budget can help.

How to use a budget planner

A budget planner is a tool that enables you to itemise and document all income and expenditure, as well as list and plan for future expenses.

The tool below is a free budget planner you can use online. Fill in your income and expenses for a quick and easy way of seeing how much you’re saving or spending per week, fortnight, month or year.

Budget planner

Free budget planner template

A budget planner is basically a table which lists different income and expense categories for you to fill in. Having it laid out like this makes it easier for you to ensure you’ve accounted for all your income and costs, and haven’t forgotten anything.

  • To use this template, simply fill it in. You can do it all on the website, can download it to fill out at your leisure or can print it out if you want to see it on paper.:
  • Click the Adobe Acrobat icon to download a template in PDF form, or click the printer icon to print it out.
  • For a blank budget template, simply download it without filling in any of the sections.

Download a simple budget planner app

If you want all this information on your phone, you can download the Pocketbook budget planner app, which is an excellent program for household budgets, and includes the following features:

Best mobile phone app for budgeting?

  • You can download it for free and use it without fees or extra costs.
  • Fill in expenses on the go for a more accurate picture.
  • Use the Pocketbook on your phone, tablet or iPod touch, or download Pocketbook software to a laptop or PC.
  • Take advantage of extra features such as visual graphics of your budget and automatic integration with your bank account so the information is always up to date.
  • Budget safely in the knowledge that Pocketbook has the same digital security systems as the big banks.

Other budget planner apps to consider:

Find our list of top 10 budgeting apps here

The latest in budgeting

How to use a budget planner

The best way to use a budget planner is to commit to starting it at the beginning of a certain time period, such as the beginning of a new week or month. Follow these steps to create your budget:

  • Enter all forms of income that come into your household. Include your salary, interest, dividends, investment income, any family allowance or benefit payments you receive, and even income from hobbies.
  • Identify any bills, including debt repayments, that come out of your income each month. These are referred to as regular expenses and include rent or mortgage payments, car loan payments, credit card payments and insurance (life insurance, health insurance etc) premiums. Car registration costs and school fees should also be included, as well as your electricity, gas and water bills. Remember, many of these are issued quarterly, so if you're creating a monthly budget, you may need to divide up your quarterly bill amount to give you an accurate monthly figure.
  • Look over your statements from the last three months and find payments for items such as food, entertainment, shopping, fuel and other varying costs. These are referred to as “irregular expenses” and also need to be included as outgoings. It is harder to plan for these types of expenses, but as you get a better control over your budget, you will have a better understanding of what limit to set for yourself. Tracking them over a monthly, three-monthly or longer period will provide a more accurate picture of how much they are costing in the long run.
  • As the month progresses keep a track of how much you spend on different items. If you use cash a lot, try and keep receipts so you remember where you spent your money. You can then divide these items into categories in your planner.
  • Once you get into the habit of recording your expenses, it will become quicker and easier to manage your finances, and plan your household budget like a pro. You will be able to more clearly see where your money is going, where it’s coming from and how to make adjustments.

When you have finished your budget for the month, you should have a figure that shows how much money is left over for that period. This is your income minus expenses.

  • If your budget shows a positive figure

If you have a positive figure, then you should first check it is correct. Check the amount of money you have left over in your bank account or wallet. If the figure doesn't seem accurate, then it probably isn't. If the figure is correct, then you can put that money towards your savings goals or debt reduction plans.

  • If your budget shows a negative figure

If your budget is in the negative, then you need to have a good look at your spending habits and work out if it is all necessary. A negative budget means additional funds you have been spending have been adding to your debt. Having to pay interest on debt will make your budget tighter each month and may impact the level of debt even further.

What are the advantages of budget planning?

There are plenty of advantages to budget planning, but these are some of the most important ones:

  1. Spending awareness. If you don't have a budget in place then you will probably be surprised how much you are spending day-to-day. It can seem like a negligible expense to buy a few extra things throughout the week such as coffee or a bottle of wine or new clothes, but it all adds up. A budget will show you exactly how much you are spending and what you are buying.
  2. Limits overspending. Budgeting gives you the ability to plan your spending and expenses. When you have a plan in place, you can ensure you have the necessary funds available for necessities. Budgeting also reduces the temptation to buy things on impulse because you have a better idea of your financial position.
  3. Improves financial control. When you know how much you're spending and what you're spending it on, you can really improve your control over your money. People who budget regularly are not the ones counting down the hours until payday. They forecast their expenses and manage their money, so they always have peace of mind.
  4. Makes saving easier. Budgeting makes it easier to identify ways to save. You clearly see how much you're spending and how much you need to save, and by listing your expenses you can find ways to cut back and reach your financial goals.
  5. Financial security. Even when you start to save just small amounts of money, they add up faster than you would expect. Saving money help create a buffer that can be used to pay for any emergency expenses that may arise.

Budgeting for business owners

Budgets are vital for business. Whether you run a multinational organisation or the local corner store, budgets are an excellent tool for day-to-day business operations. There are various budget planning software packages available for businesses, and most can be customised to suit any business' needs.

  • BudgetTracker is a budgeting tool with features that are tailored for small businesses.

Business budgets can be used for:

  • More effective money management
  • Business performance monitoring
  • Identifying and meeting financial objectives
  • Improving decision making
  • Identifying potential cash flow difficulties or problems
  • Creating informed plans for the future
  • Managing employee expenses such as wages, training and further education

Budgeting for students

Most students are on limited incomes, so using a budget planner can be a great way to stay on top of the bills and have enough left over for personal expenses.

  • Splitwise is a budgeting tool with additional features for splitting costs such shared accommodation, managing IOUs and keeping track of who owes money to whom.

Student budgets can help you:

  • Reduce the temptation to overspend, and make you think about whether a purchase is really worth the cost
  • Become far more aware of what money you have available and what areas of your spending you can cut back on
  • Develop strong financial management habits that you can take with you wherever you go and whatever you do

Budgeting for families

Having a family household can make saving difficult, but a budget can help overcome that problem. Thinking of your household more like a small business can be an ideal way to maintain financial stability and stay in control. Many families don't have a clear idea of where their money goes, but know that far too often there simply isn’t enough left at the end of the week. If this sounds familiar, a budget planner will come in very useful.

  • The ATO budget planning app will help you manage your household budget, and includes tax deduction and management tools, inbuilt calculators, and features for managing superannuation.

A family budget can help:

  • Make it easier to track spending habits and look for disproportionate costs
  • Identify areas where spending can be cut back with minimal impact
  • Allocate funds to cover specific bills, expenses or spending needs
  • Plan for your next family vacation

Things to avoid when planning your budget

When creating your budget planner, keep in mind the following:

  • Think long-term

Budgeting is an ongoing commitment. If you find yourself repeatedly pushing expenses over to the following month, or failing to plan ahead for the cost of birthdays or Christmas, you should re-examine your budget plan.

  • Set realistic expectations

There is no point planning a budget that you will never stick to. Be realistic about how much money you are going to put aside for spending, and also about how much you plan to save. The first month your budget is in place is a good barometer of how realistic it is. If you can't stick to it in the first month, then you need to revise it.

  • Don’t overspend

Negative numbers in your budget are not a good thing. If you're spending more than you earn, you're putting yourself on a fast track to debt. Budgeting allows you to see if your expenses are higher than your income, so you can take action sooner rather than later.

  • Make sure you save

Building up a savings amount to act as a buffer for your finances should be a high priority. Decide on a realistic savings plan and stick to it, even if this means adjusting your spending habits. If you haven’t done so already, consider setting up a tailored savings account. If you’re only saving small amounts, look for an account with no fees. If you can save larger blocks of money, consider a high-interest account instead.

  • Don’t forget the small stuff

When you list all of your income and expenses you may find you have money left over. This may not always be accurate, depending on how meticulous you are with recording small purchases. Small stuff may not be obvious items such as a coffee or a magazine. Think about things such as the $2 you might have been charged for withdrawing money, or the $8 accounting fee on your bank account. These small amounts add up and need to be incorporated in your budget. When you find budget discrepancies, track them down and find the cause.

  • Adjust your budget regularly

Budgets need to be regularly adjusted to match changing finances. The interest rates on your mortgage might change, your water rates or electricity charges could increase, or you might add to your credit card debt, increasing your monthly payments. Even if you reduce your credit card debt, this will result in lower monthly payments, which will again affect your budget. It's important to review your budget regularly and account for any changes, so you can stay in control of your money for the long term.

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