Have you ever considered a Budget Planning Day?


Do you have goals in mind like starting your own business or investing in property, but find that day to day living expenses are setting you back?


If you find yourself in this situation then despair not. You are not alone, in fact, you are amongst the majority. Importantly though, there is a way off this seemingly endless merry go round. The solution is not sexy and does involve some work, but it’s probably the easiest part of the financial planning process and very rewarding.

Yes, you may have guessed it, it’s called a personal budget and it represents the core foundation of your financial position. When done properly, a personal budget gives you control of your finances by clearly identifying where your after-tax dollars are going, on both a fixed and discretionary basis. A budget is a living document that changes as your circumstances change and helps you save towards your long-term financial goals. 


Key Tips For Creating Your Personal Budget

  1. Begin with the right mindset. Treat your household financial situation as though it were a business where you have money coming in, money going out and a surplus which represents your savings or “profit”.


  1. To properly structure your budget that saves you time it’s best to use a template that will accept your input and automatically break it down by week, month or year. Johnston Grocke offers its clients a free personal budget template to make starting easy.


  1. In creating a budget, use figures that are accurate. You can do this by having a look at your bank statements over the last 3 months to get a realistic feel for expenses. Fixed expenses like rent or mortgage are easy to input whereas you might need to use an average for more variable expense categories like groceries or petrol usage.

After your budget has been set up for 12 months, (usually July – June to coincide with the tax year), you will need to manage it on an ongoing basis. 


Key Tips for Managing your Budget

  1. Set up 2 bank accounts, one for funds to cover all of your fixed or reoccurring expenses such as mortgage, insurances and vehicle repayments, and another account for discretionary expenditure. Ideally, have 3 months cover in your fixed payments account so that should you be unable to work for 3 months, you will still have enough money to cover your bills.


  1. Set up a weekly auto transfer from your fixed payments account to your discretionary account, to occur Mondays. This means your discretionary account will be topped up at the beginning of each week and you will know on Friday how much you have to spend the weekend.


  1. Review your expenditure on a weekly and monthly basis, looking for any significant overspends and underspends. Use the review process to initiate discussion around what is happening and why.


  1. When reviewing discretional expenditure, do as businesses do and ask yourself what value you are really receiving for this expenditure versus the value you will get long-term by cutting back and adding to your savings.


A Last Word of Advice

A budget is really just a tool to help you take control over your finances and save towards longer-term goals. Discipline is required for the tool to be used effectively. For someone who has never used a budget before and has possibly gotten used to living a pretty comfortable lifestyle, a change in mindset will be needed. Maintaining a clear vision of your long-term goals can provide sufficient motivation, along with a trusted financial advisor to help you stay focused.


If you need any help with your budgeting, please don’t hesitate to call Johnston Grocke on 83030300.


Published January 31st, 2018

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On this entire website, information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

No representation is given, warranty made or responsibility taken about the accuracy, timeliness or completeness of information sourced from third parties. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

Anthony Klatt, John Grocke and Mathew Wilkshire are authorised representatives of Paragem Pty Ltd. Paragem Pty Ltd ABN 16 108 571 875, is the holder of Australian Financial Services License number 297276 and these authorised representatives trade as Johnston Grocke.

AG Finance Group is a Corporate Credit Representative (396686) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit License Number 391237).