Step By Step Guide To Budgeting

Money Detective Budget Worksheet

Click on the PDF Icon to access Money Detective's Budget Worksheet

Income

Record all of your income into a budgeting programme or worksheet. 

• Look at all of your income sources
• Identify how much you get paid from each source
• Identify how often you get paid
• Remember to include all other items such as bank interest, maintenance, Government payments, etc.
• Record these figures into a budgeting programme
• Total all income

How much do you receive in each week / fortnight / month ?

Expenses

Gather copies of your receipts, bills, bank statements and anything you have that records your current expenses

Break your expenses down into Fixed (non discretionary)  and Optional (discretionary).  Record all your expenses into a budgeting programme or worksheet and how often they are to be paid

• Record your home loan repayment
• Record your payments to any other loans or credit cards
• Record your fixed (non discretionary) expenses under the appropriate headings
• Record your optional (discretionary) expenses under the appropriate headings
• Identify your future goals and savings plan  
• Record your figures for future goals and savings
• Identify your future capital expenditure 
• Record your figures for future capital expenditure costs
• Total each group of expenses
• Total all expenses

How much do you pay out each week / fortnight / month?

Depending upon which budget spreadsheet / document you are using, there are going to be headings provided for you to record different income and expenses. Please note that you need to use a comprehensive set of budget forms to ensure that your budget works best for you. If you complete a budget and a number of your expenses (such as your future goals or capital expenses) are not recorded then the budget will certainly not work and you will be likely to have financial troubles from mismanaging your money.

Net Position

Take your total expenses away from your total income to find your net position. You will find yourself with one of three results:

Income > Expenses = Savings

Income = Expenses = Break even

Income < Expenses = Depletion of savings or accumulation of debt

Income greater than expenses = Savings

Congratulations you have a surplus. You may still like to review your income and expenses to see if there are sections in the budget that you can trim back on.

Can you increase your surplus? The more you can set aside as regular savings, the greater your financial position will be over the long term.

Income equals expenses = Break Even

You are doing well to be breaking even, however it is ideal to have the ability to save money for the future including the rising cost of living, unforseen emergencies or goals that you wish to achieve.

You should review your income and expenses and look for areas to cut expenses so that you can improve your position by getting a surplus. You are very vulnerable sitting so close to the edge here and anything can easily tip you over to a negative position. Plan and prepare now so this doesn’t happen.

Expenses greater than income = Depletion of savings or accumulation of debt

This is not a good position to be in. This means you are living on savings, debt or borrowed money and this can have a major impact if this is a medium to long term position. Ideally everyone should be at a minimum of a break even position, but being in a savings position is the ultimate.

As a major priority you need to review your income and expenses and look at areas that you can change today to get your budget in a break even position as a first step and then a savings position as a second step.

Next Steps

Visit our Saving Money Tips Webpages where you can view over 1000 Tips to help YOU save money. They will help you trim down your expenses and find some surplus money.

Visit our Ways to Make More Money where you can view over 395 Ways to Make More Money which could help you earn that little bit extra and ease any financial pressures.