ANZ

Budgeting

A budget helps you manage your day-to-day finances. Budgeting can help control your costs by showing how much money you have and how you spend it.

A budget can help you:

• Achieve financial success by controlling or monitoring your financial situation.
  
  
• Reach your financial goals, which might include saving a deposit for a home, buying a car, planning for retirement, paying off credit cards or saving for a trip.
  
  
• Identify expenses and show how the smallest of expenses can add up.

Understanding your day-to-day finances can help you save money. If you know what you spend your money on, you also know what savings can be made by reducing spending in certain areas.

This table shows how small expenses can build up over time using estimates of costs.

A sample of spending habits based on a 5-day working week

		Habit				Daily				Monthly1				Annual2
		Two cups of coffee a day at local cafeteria @ $3 per cup				$6				$120				$1560
		1 packet of cigarettes a day				$10				$200				$2600
		Going out for lunch 5 days a week				$8				$160				$2080
		Totals				$24				$480				$6240

Budgeting does not necessarily need to reduce life's little luxuries, but should help you to question the importance and regularity of these expenses. By making small changes, you can free up money to spend on helping to reach your financial goals.

If you don't have a budget it can be harder to keep track of your spending habits and you could be less able to manage your spending and any debt you may have.

Budgeting tips:

• Aim to pay off more than the minimum monthly repayment on credit cards.
  
  
• Always make credit card payments before you spend money on luxuries.
  
  
• Review your budget regularly to help ensure you remain on track.

¹ One month is taken to consist of 20 working days.
² One year is taken to consist of 52 weeks i.e. 260 working days.