How to stick to your budget

Budgeting for a holiday or saving for a deposit? Even the best budget can unravel if the right tools are not in place. In this article, we look beyond the basics and focus more on what it takes to stick to your budget.

How to stick to your budget

Here are five tips to help you stick to your budget.

1. Stocktake. Spending more than you earn?

Subtract your total weekly expenses from your total weekly income. How’s it looking? Ideally, you’ll have more coming in than going out. Over time you’ll be able to save and build up your reserves.

First, you want a buffer in case things go wrong. Financial advisers used to talk of having six month’s spare cash in the bank. When this seemed out of reach for most, they talked instead of having three months in reserve—but many people struggle to even have one.

Living month to month is stressful enough; living week to week even more so. Getting your finances into a stable and sustainable place is the goal. Properly accounting for income and outgoings is the first step.

2. Cut costs

Realistically, the quickest way to improve your personal bottom line is to cut costs – to curb unnecessary spending.

Go through your expenditure. You’ll find there are fixed costs (e.g. rent or mortgage payments) you can do little about, and other areas where you could cut but it’d be unwise to do so (e.g. insurance).

Unfortunately, the areas where you can make the greatest savings (your discretionary spending) are often the things that are most fun – like going to the movies, or big Friday nights out.

Once more, the crucial consideration is ‘balance’. You can draft an extreme austerity plan, but you’d be unlikely to stick to it.

Be realistic. Don’t introduce cuts across the board or take $20 off food without knowing what you can (and will) give up or change.

3. Have a plan

It’s easier to keep to a budget if you have a goal you’re working towards. It might be something humble like a pair of shoes or cast-iron wok.

It could be bigger ticket items like a car, an overseas trip, or your first home deposit. Perhaps you’ve just got debts you want to pay off.

Whatever it is, having a plan is the best way to keep focused and ensure spend-ups and blowouts don’t happen too often.

4. Sort your day-to-day money management

Set up a system that makes saving automatic—and limits your ability to spend more than you’ve budgeted. It’s a good idea to set up several bank accounts, with direct debits into (or out) of each.

For instance, you might have a general account where your wages are paid into. Each week, money is diverted from here into a designated ‘House’ savings account (for your home deposit).

Don’t touch this. You might have another couple of accounts—a smaller one where you trickle money in for that trip to New Zealand, another to fund big, occasional bills (e.g. vehicle maintenance).

Your goal? Each month your overall financial position should be stronger than the month before.

You may also want to consider a Term Deposit to help you reach your savings goal.

5. Track your progress

Check your finances each month to see if your savings and spending plans are on track. If you’re extra organised, fill out your own Statement of Financial Position in Excel.

Don’t just look at the bottom line. Where are you over? Where are you under? What little fixes could bring things back into line? Are your targets realistic?

Remember, the best budgets are regularly reviewed and refined – and evolve over time.

Need a hand? Call us to work out how much you’re saving on 03 9553 0271.

Source: NAB

Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at

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Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.