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How to create a budget

A budget is a detailed monthly plan showing where your money is coming from, how much is there and where it goes. Having one is an excellent way to keep your finances in order. Our budgeting tool can help you create an effective budget, or you can do it yourself using this guide.

1. Gather every financial statement – bank accounts, investment accounts, recent utility bills and any information about a source of income or expense. The more information you have, the easier it will be to create a monthly average.

2. Record all sources of income – salary (net income, or take home pay, is fine), outside income (e.g., interest on investments), etc. Record total income as a monthly amount.

3. List all monthly expenses – mortgage repayment, car repayment, insurance, groceries, petrol, train/bus travel, utilities, entertainment, school fees, etc.

4. Split expenses into fixed and variable – fixed expenses broadly stay the same each month (mortgage/rent, insurance, car loan, etc). Variable expenses change from month to month (groceries, petrol, entertainment, etc).

5. Total income and expenses – if your income exceeds your expenses, you’re off to a good start. If it’s the other way round, some changes will have to be made.

6. Make adjustments to expenses – if you have accurately identified and listed all expenses, the goal is to balance your income and expense columns. This means all income is accounted for and budgeted to a specific expense, including contributions to a savings account. If your expenses exceed your income, look at your variable expenses to see what can be cut.

7. Review regularly – every month, compare your actual expenses with your budgeted ones. This will show you where you’re doing well and where you may need to improve.


Keep reading

Tips to control spending

We have some tips so you can take control of your finances, reduce or wipe out your debt altogether and maximise your savings by keeping your spending in check. 

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Have a back-up plan

Despite our efforts to plan for everything, there will be times when you need access to extra funds to pay for emergencies or unexpected bills. 

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Ways to save

No matter what you’re saving for – a holiday, a car, or a home loan deposit – we can help you get there sooner. The best place to start is with a budget.

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