Key points

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

One of the most common mistakes people make with money is thinking they don’t need a written budget. Perhaps you, too, believe that paying close attention to your household incomings and outgoings is boring, tedious, or just a bit odd.                                                                 

When it comes to your money, having no plan at all is often a plan to fail. If you’re looking to kickstart your financial wellbeing and get your house in order, here are 6 concrete steps you can take – starting today.

Step 1: Find out where your money goes

Here are a few questions you should be able to answer: How much are you paid? How much do you spend? What’s left over? As living costs rise, it’s important we all know the levers that we should pull back our spending on discretionary areas. It starts with getting to know your cash flow.

To work out exactly where every cent is going, select a period, about 3 months or so, and make a note of everything you spend. You can do this any way that suits – with paper and pen, or a digital tool. The CommBank app has a range of tools, such as Spend Tracker, Cash Flow View and Money Plan, to help you track cash flow, monitor your spending and saving, set budgets and more. 

Step 2: Find ways to spend less and save more 

Once you’ve figured out where your money goes, you can then 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/eating out
  • Fitness
  • Bills
  • Childcare
  • Transport

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

When reviewing expenses, focus on the “big rocks” of your budget first, such as housing, insurance, and bills. For insurance, shopping around, reviewing your coverage and revising your excesses can be effective ways to reduce premiums. Compare brands by using websites like the federal-government run Energy Made Easy or

On the income side, Benefits finder in the CommBank app can help you identify any government concessions, grants or rebates that you might be eligible for. 

Step 3: Look at incomings and expenses 

To work out how much you’re earning in an average month, check your payslip and focus on the net income. This is the actual amount that goes into your bank account after tax and super is deducted. 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. If the margin between what you’re spending and earning is too slim, you may need to make some tweaks. Work out what you can change, or where you can make trade-offs, to live within your means.

Step 4. Build an emergency fund

Having a pot of readily-accessible cash can not only help relieve financial stress, it’s also the foundation of good investing. Why? Because most investments require a long horizon, and nobody wants to have to liquidate an asset to fund new tyres or unforeseen medical expenses.      

Most personal finance experts recommend having between 3 and 6 months of living expenses saved in a dedicated emergency fund, stored in an at-call high-interest savings account, or in an offset account for your mortgage, if you have one.

Step 5. Pay off high interest debts

While you’re building your emergency fund, don’t forget any high-interest consumer debts you hold, such as credit cards, personal and other loans. Loans not secured against an appreciating asset – like a property – usually attract relatively high interest rates so it can make sense to direct some of your household’s surplus cash towards knocking over these debts, using either the “snowball” or the “avalanche” method.

The snowball method involves lining up debts from smallest to largest by amount owed and starting to pay off the smallest one first. This can give you an important sense of achievement and a confidence boost. Alternatively, the avalanche method means identifying your debt with the highest interest rate and paying that off as the priority to minimise total interest paid.

Step 6. Experiment with a money goal

Once you have control over your cash flow and are beginning to put it to work, it’s time to dream big. A solid money goal is simply a dream with 2 special features: a price tag and a deadline. Whether it’s saving for a holiday or a home deposit, the first step is to identify your dream. What do you want? Then, research the likely cost of your dream and figure out a time frame over which it will be realistic to accumulate that money.

If you’re new to this, start small. Perhaps you could aim to save $1,000 to fund next Christmas, and say for example, you have 12 months to go, so that’s roughly $85 you need to set aside each month for a less stressful seasonal period. Write down your goal and review it regularly. When it comes to mastering your money, it’s all about starting small and simply keeping it going. 

Jess Irvine (@moneywithjess) is a finance expert, author of Money with Jess and a respected journalist with nearly two decades of financial reporting experience. 

Things you should know

This article was originally published in Brighter magazine.

This article provides 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 personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider the relevant Product Disclosure Statement and Terms and Conditions, and whether the product is appropriate to your circumstances. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of printing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA."