Get on top of your Finances!

It is easy for us to sit here and daydream about our dream home or the perfect holiday, but coming back to reality, what is stopping us from achieving those goals? Most of the time, it is our financial commitments. Unfortunately, many of us have multiple expenses to juggle, and it can become overwhelming. Therefore, it’s no doubt that getting on top of your finances is an essential goal.

So how do you get on top of your finances? The key is having a personal budget and sticking to it. When creating a personal budget, you should consider both fixed and variable expenses which can include:

  • Rent repayments
  • Mortgage repayment if you own a property
  • Grocery shopping
  • Insurances
  • Other utilities and other commitments you may have.

You might have noticed that most of the expenses listed above are necessities and are challenging to cut back significantly or eliminate; that is why this can be tricky! The following tips will help you create your personal budget by providing an effective way to categorise your income and expenses. This will set you on your way to achieving your financial goals faster!

Why create a personal budget?

There are many benefits of having a personal budget, some of which we have mentioned previously, like the ability to achieve that dream home, go on that perfect holiday or live a stress-free life in terms of keeping up with your financial commitments. However, there’s more! Having a personal budget allows you to know exactly where your money is going and help you reduce spending on unnecessary items that add little value to your life.

Using this knowledge, you can build a strategic personal budget that is effective for your current lifestyle. This will, in turn, help you make more informed decisions when it comes to your daily spending and allow you to save more consistently. Most people have a general understanding of their expenses; however, taking the time to build a strategic personal budget will put you in a better financial position.

Preparing a budget for you and your family

There isn’t one correct way to create a personal budget because everyone’s lifestyle is different. Your personal budget will look completely different from the person’s next to you. How you set up your personal budget will depend on the following:

  • Frequency of income (e.g. weekly, monthly, fortnightly)
  • Other sources of income (side businesses, commissions, bonuses, income from investments etc.)
  • Categories of expenses that contribute to your monthly spending.

Determining which of the above is relevant to you, will give you an idea of how you should calculate your income and expenses. The key is to keep it consistent; so if you choose to calculate your income monthly, then your expenses should also be calculated monthly.

The next step is to organise your income into steady income or variable income and your expenses into standard fixed expenses or temporary fixed expenses. This will help you gain a better understanding of your current financial situation.


Steady income

A steady income is what you receive consistently whether it’s weekly, fortnightly or monthly. This will most likely be the income you receive from your permanent full-time job. A steady income is predictable, and you know exactly how much you will be paid each period.

Variable income

You can have a variable income if you’re working in a casual job where your work hours vary from week to week, and there is little consistency in your pay. This type of income is unpredictable and therefore, can be more difficult to work around. In this case, it is beneficial for you to track your minimum and maximum income each period to determine an average figure that you can use.

Standard fixed expenses

Standard fixed expenses are often necessities and can include ongoing bills that you will need to pay to fulfil your basic needs. These bills can be:

  • Electricity
  • Gas
  • Phone
  • Internet
  • Insurances such as home insurance or health insurance

Temporary fixed expenses

This type of expenses has a fixed amount, but are not ongoing forever and can be eliminated once the full payment has been fulfilled. It is important to consider these expenses separately if your goals are to minimise your financial liabilities. When you separate these expenses, you can see how much paying off these debts will improve your daily cash flow. Temporary fixed expenses can include:

  • Credit card repayments
  • Loan repayments
  • Car loan repayments
  • Personal loan repayments.

Tracking your budget

Having a personal budget is only the first stage in achieving your financial goals. You will need to get into the habit of tracking your budget regularly to ensure that you’re heading in the right direction. You can do this by using your bank statements to compare your actual spending with your planned spending and see if there are any significant differences. Any adjustments that need to be made to your actual spending or to your personal budget can be made immediately.

Creating a personal budget and sticking to it will help you achieve your financial goals faster! If you’re interested in learning more about creating your own personal budget, contact Sarah from FutureNow Finance on 1300 013 730 or email