Best Budgeting Apps of 2023 – Forbes Advisor Australia
Creating and managing a successful monthly budget is all about knowing how much money you bring in and how you spend it. Your income should be greater than your expenses and you should have enough leeway to put money aside each month for savings and retirement.
If your balance isn’t where you want it to be, it’s time to create a budget plan.
How to make a budget
To begin creating a budget plan, list your income and expenses. The easiest way to do this is to connect your bank accounts to your favorite budgeting app, but you can also do it manually with paper or pen or a spreadsheet program.
Then separate the fixed expenses from the variable expenses. Fixed expenses are those that do not change from month to month, such as housing, utilities, insurance, child care, and loan payments, including car, student loan, or credit card payments. Variable costs include food, entertainment, meals, vacations, and streaming services. Finally, consider putting monthly contributions toward savings goals like retirement or an emergency fund.
If your expenses exceed your income, first look at your variable expenses to see where you can cut your budget. After that, you can consider ways to reduce your fixed expenses, such as moving to a cheaper neighborhood with lower rent or refinancing your debt.
How to budget for groceries
Budgeting for food can be tricky – everyone has to eat. If you’re not sure how much to spend on groceries, compare your spending with research from Newcastle University, which analyzed household food spending for single people and families of five. Keep in mind that special dietary restrictions can increase your grocery bill.
If you want to reduce your grocery bill, meal planning can help. Make a weekly plan to make recipes that share common ingredients or use pantry staples. Meat is a significant expense, so having a “meatless Monday” meal can also reduce food costs. You can also save money by purchasing in bulk instead of single-use packaging.
How to budget for a vacation
A vacation can be an exciting savings goal if you have some breathing room in your budget. The first step in vacation budgeting is to decide how much you want to spend and when you want to go. If you want a $5,000 beach getaway a year from now, you can split that with a monthly savings goal of about $420.
Not sure you want an expensive trip? Consider lower-cost options like a road trip or keep your eyes peeled for a good deal. Budgeting for your vacation means you’ll have the funds ready when flight prices drop or when your aspirational ski lodge becomes available.
How to budget for renting
Many Australians use the 30% method to determine how much they should spend on rent. This budgeting principle allows you to spend up to 30% of your income on rent or mortgage (this should include household utility bills if possible). Using this rule of thumb, if you make $1,000 a week, you’ll want to spend no more than $300 on household expenses per week.
Sharing an apartment or house can help reduce your housing budget, as can moving to a cheaper area. If finding more affordable accommodation is not an option, you may need to look to other areas of your budget to reduce costs.