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New year, new financial you

$2.1 trillion. That’s how much Australian households owe right now, according to the latest ABS stats.(i) Sound scary? The good news is, there are ways you and your family can ensure your finances stay out of the red and in the black. The key is good old fashioned budgeting.

Why a budget is important

Budgeting is simply the most straightforward, proactive way to ensure you will always have enough money for the things you need whilst allowing you to put a little aside for the things at the top of your wish list. That’s the practical side of it. A budget can also help you reduce financial stress, improve your family relationships, redefine your personal values, and provide a good example for your kids or grandkids.

How to set up a budget

The first step is to do an audit of what you’re spending. You may also need to do a round-up of what you’re earning, if you have several income streams. Start by gathering as much evidence as possible; utility bills, receipts, bank statements etc. Make a tally of your outgoings. Be as accurate as you can; where you don’t have a record to substantiate a line item, try not to underestimate it.

Then, compare your income to your outgoings. If you spend more than you earn, you’ve got work to do. If you’ve got a surplus, that’s a great start, but there’s always room for improvement.

The last step is setting goals. Choosing well defined goals – beyond just ‘save more’ or ‘get rich’ – is important for your long-term budgeting success. Try setting at least a few short, mid and long term goals. For example, in the short term, you might aim to reduce your spending on clothing by $100 a month. In the long term, you could aim to build up an emergency fund equivalent to six months’ household income.

Why budgets fail

If all this sounds familiar to you, chances are you’ve tried and not succeeded at budgeting in the past. That doesn’t necessarily mean you’re ‘bad with numbers’ or lacking discipline. There are several common reasons why budgets don’t stick. Many failed budgets had no defined goals. Others were too restrictive, allowing no room for spending on things like meals out or entertainment; anyone who’s tried to completely cut ‘fun’ spending knows how unrealistic this is. Many budgets also ‘break’ after a short time because they fail to account for unexpected emergency expenses, from vet bills to urgent travel.

Once you’re aware of why your last budget didn’t succeed, you can start to build a better one.

The right technology can help make your budget more accurate, realistic, effective, and easy to stick to. You don’t even have to create a spreadsheet from scratch, or use complicated software on your PC. You can carry a budgeting solution in your pocket with a handy smartphone app.

Budgeting apps to make it easier

  1. ASIC MoneySmart’s TrackMyGoals and TrackMySpend apps – FREE

These government-produced apps draw on tonnes of research to help you implement proven savings and budgeting strategies.

  1. Pocketbook – FREE

Pocketbook syncs with your bank account, automatically sorts your expenses into categories, and receive automatic alerts and warnings to keep you on track.

  1. Fudget – FREE

Fudget is a simple and fast alternative to feature-rich, complex budget planner / personal finance apps. There are no categories to manage, no charts to interpret and no learning curve. Create simple lists of incomings & expenses – keep track of the balance. One-tap adding and editing, Star an income/expense to repeat it on future budgets and it’s a universal app – install on any device.


At BMO, we don’t advocate any particular app or program, it’s all about finding the right tool that works for you and your family. It really doesn’t matter if you plan and track using pen and paper, a spreadsheet, software, or a fancy mobile phone app. The key to success in all of these cases is setting a realistic budget and sticking to it.

Still need a bit of help creating a budget, getting your expenses under control, or increasing the rate at which you save? We’re here to help. Give us a call today to discuss your household budget situation.


(i) ABS, 5232.0 – Australian National Accounts: Finance and Wealth, Mar 2016

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Ashleigh Peltz

About the author

Ashleigh Peltz joined the BMO team as an Assistant Accountant in April 2014, bringing with her experience in retail, customer service, accounting and administration backed by a Certificate III in Business Administration. She has recently completed a Bachelor of Commerce Majoring in Accounting through USQ. Ashleigh showed a real flair for accounting during her secondary studies and achieved READ MORE

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