How to work out where your money is going

Have you ever looked at your bank balance and wondered where your money went? You might have a clear picture of your committed expenses such as your rent, mortgage payments or bills, but it’s possible there are some costs you barely notice like your subscriptions and other fees.

The best way to understand where your money is going is by becoming a forensic investigator of your finances. You’ll need to get all of your expenses on the table and may find this eye-opening. Becoming aware of your choices helps you set a budget so your money is doing what you want it to.

Our research found that those who keep a budget – either mental or formal – have higher financial wellbeing than those who don’t. A budget will help you track your spending, save money and be confident that your money goes where you want it to.

Here are three easy steps to help you start.

Step 1: Find out where your money goes

To work out exactly where every cent is going, select a period of time, about three months or so, and make a note of everything you spend. You can go through your transaction history or use Spend Tracker in the CommBank app to do this.

Step 2: Categorise your spending

Having figured out where your money goes, now categorise your spending. This helps you identify which of your spending habits you can tweak, entirely change or ditch altogether.

Here are some categories to consider.

• Food
• Entertainment or eating out
• Fitness
• Bills
• Childcare
• Transport

Tally up how much you’re spending in each category. This will help you to prioritise your spending.

Step 3: Look at what's coming in

Check your payslip, focusing on net income, which is the actual amount that goes into your bank account after tax and super is deducted to work out how much you’re earning in an average month.

If you’ve already got some savings set aside, look at the interest you’re earning on that too.

Subtract the average amount you spend from your average income. This is the amount you’re left with to either put towards clearing debts or increasing your savings.

To make things easy you can lay this all out with our Budget Planner.

If the margin between what you’re spending and earning is too slim, you’ll need to make some tweaks. Work out what you can change, or where you can make trade-offs to live within your means.

Next, find a budgeting strategy that suits you and draw up your budget.