Keeping your household budget in check


Ever gotten to the end of the month and wondered where all the money from your pay check goes? Keeping a budget can help you track where your money is going, stay on top of your bills and debts, and direct your earnings towards your financial goals.

Budgeting might sound restrictive, but it goes beyond scrimping and scraping – more importantly, it’s about recognising your spending pattern, sorting out your priorities and managing your expenses to find that sweet spot between spending and saving.

Here are a few things you should know about creating and keeping a household budget.

How do you budget?

A budget is essentially comprised of two components: income and expenses.

Income is the money that you receive from a variety of sources, such as take-home pay from a job, benefits, returns from investments and more.

Expenses could be divided into three categories: fixed expenditures (e.g. rents, fixed rate mortgages), variable expenditures (utility bills, groceries, petrol), and discretionary expenditures (gym memberships, streaming subscriptions, other recreational goods and services).

The first thing to do is to track down and keep records of these three components in your life for around a month. There are many different methods to do this, from the humble paper and pen to spreadsheets and graphs. You can also find many free budgeting templates or apps on the Internet that will pull out your weekly, monthly and annual numbers in an instant.

Once you’re done, you will be able to find out your net income by subtracting expenses from your income. If you have a positive net income, or a surplus, you can put the extra income into your savings account or invest it. If you have a negative net income, or a deficit, you can take a look at your budget to see which expenses you could reduce. Generally, discretionary expenses should be the first to go when you’re looking to minimise your spending.

After you get your budget in order, you can set your financial goals for both the short and the long term, be it going on a holiday or creating an emergency fund for rainy days. You can periodically review your financial priorities to adjust to changes in your job or lifestyle.


Need help managing your budget with a loan on the way? Contact us for further info.