Everyone’s lives are different and we all have different financial needs and pressures. We also have different values and expenses, there are no set rules when it comes to budgeting.

But what we do know is that if you have a budget, you’re more likely to have higher financial wellbeing. Our research revealed that whether mental or formal, having a budget allows you to have better financial wellbeing than not having one at all.

Still sometimes it’s hard to know where to begin, so once you have worked out where your money is going by looking and what’s coming in, try using one of these guides to set up your budget.

Use different accounts to help you budget

Some people like to stick to their budget by separating their money into different accounts, each account having a set amount of money to spend on everyday items or bills, for example.

Let’s look at an example of how you might set up your accounts:

  1. Commitments - such as bills, paying off debt and making rent or mortgage payments
  2. Essentials - like your groceries, transport and health costs
  3. Lifestyle – such as buying clothes, movie tickets or eating out
  4. Saving - for your rainy day fund or one day goals or making super contributions

This can be a good way to make sure you only spend the money you have allocated for that purpose.

First you need to work out how much you need in each account. It’s best to start with how much you earn, then subtract your committed and essential expenses. You can use our Budget Planner for this.

Next, work out how much you can save and how much you want to spend on lifestyle costs.

Simple steps to budgeting with your 50:30:20

The 50:30:20 guide was developed as a simple tool to help people get started and is better used as a guide as it may not always be achievable.

You will also want to tailor this guide to your needs. Sometimes you may need to focus on paying debt before you start building up savings. This guide should help if you don’t have a budget at all.

Here’s how it could work:

  • 50% - essential living expenses like rent, bills and groceries
  • 30% - lifestyle costs like eating out, going to the gym and buying clothes
  • 20% - put into savings, your emergency fund or making extra super contributions 

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Some terms and conditions apply to our financial wellbeing features – please see commbank.com.au for details.