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Setting up (and sticking to) a budget

The effort involved in setting up a budget is worth the peace of mind and the feeling of being in control of your finances.

Setting up your budget

A budget is simply a close look at where your money is going. To move forward you first need to look back. Open your online banking and look back over six months to a year so you can build a realistic idea of your income and expenses. Then you'll be able to set up a budget for your future spending and saving.

Having a budget allows you to

  • reduce your stress by setting aside enough money for bills and expenses, and
  • set up a plan for your own financial goals.

Start with your income

This should be a relatively easy step. Work out how much money is coming in and how often.

Then work out your expenses

While it varies from person to person, a budget should include all of your cost-of-living expenses, this can include, but is not limited to, these categories:

  • Home loan repayments (or housing costs)
  • Food
  • Transportation
  • Child care
  • Health care
  • Insurances
  • Education
  • Pets
  • Utilities
  • Repairs and maintenance
  • Entertainment
  • Leisure spending
  • Savings, and 
  • anything else that comes from your bank accounts.

Some costs will be fixed, while others are variable - it's important to prepare for increases. You'll soon find that it quickly adds up.

Free budgeting tool

There are some great budget tools and apps available to help you get into shape. A good budget tool can help you spend and save sensibly while saving you time and effort. Thanks to modern technology - a lot of apps will automate part of the process for you and can sync with your bank accounts for a true measure of your spending.

The financial coaches at our partners Financial Wellbeing Collective recommend MoneySmart's budget planner tool. It's free and easy to use. The budget planner takes you through category by category for a really thorough review.


Bucketing can be a smart way to manage your money. Once you know how you'd like to organise your money, you might want to set up multiple bank accounts called ‘buckets’ and use each one for a specific purpose such as bills, savings or entertainment.

You may want to set up a direct debit for each of these buckets so that each payday some of your money is allocated to each fund. This can be helpful for managing household bills.

If you calculate on average how much your utility bills cost per year, divide that number by 12 or 26, depending on whether you want to pay into your bucket monthly or fortnightly. This method can help you avoid bill shock when a larger utility bill comes your way.

Make a plan

Home ownership is a journey. It might be beneficial to make a three to five-year plan for your home loan, whether you’re just starting out of if you’re considering refinancing your loan. Take some time to consider your future

Need some help? 

Did you know we have a financial coaching service available for eligible Keystart customers to help you reach your financial goals and build your financial toolkit?

If you feel like you are facing some financial difficulty, get in touch. We take your financial concerns seriously. Get in touch and our team can look into your situation with you.

Sticking to your budget

You've done the hard work of setting up your budget, taking note of all of your expenses and creating goals for saving money. Now it's time to put your plan into practice.

We've put together a few tips that might help you stay on track.

Track your spending

Tracking your spending is a way to take control of your money. Once you have set up your budget, try to check in regularly to see how you are tracking. Knowing exactly how much money is coming in and going out can help you spend less and save more.


Bucketing involves splitting your money into different segments, rather than having all of your funds in one account. For example, having one account for bills and loan repayments, one for groceries and another for entertainment and eating out. This will give you a clearer view of your spending and may highlight opportunities for savings.

Check your bills

Reviewing your bills to check if the cost is as expected can help you become more conscious of how you are using energy and even your water. Water Corporation has some helpful tips on how to save water in your home. You can make a big difference by making sure you don’t have any leaks in your home. Synergy also have some great tips on how to reduce your energy bills.

Set limits and reminders

Taking note of how much you spend on certain expenses such as groceries will help you to set a realistic limit. Knowing when regular expenses are going to pop up such as utility bills and loan repayments means you can set reminders to put aside money for these payments.

Remember budgets are not set in stone, if you find you may have stretched yourself a little too thin on your budget you can always adjust it to make it more realistic for you.

Separate needs from wants

It is important to understand the difference between a need and a want. Needs are essential items you need to live such as accommodation and electricity. Wants are things you can live without like that trip to the coffee shop. Can you reduce your spending on your wants? Even the smallest of savings can make a big difference in the long run.

This doesn't mean you can't have any fun. Don't be too hard on yourself, treat yourself every now and again to reward yourself for doing all this hard work and staying on track with your budget. Maybe there's something amazing you can do for free.

Have a clear goal

Having a clear reason for your budget can really keep you motivated. Are you saving for a holiday or for an improvement around your home? Keeping this in mind can help you to stick to your limits. Put some pictures on your fridge or your phone to keep you focused on your end goal.

Don't do it alone

Why not budget with a partner or friend? Budgeting with someone else can help keep you both accountable and make it a bit easier to stay within your limits.