Budgeting

A budget is a plan of what money you expect to receive and how you expect to spend it. Everyone can benefit from having a budget. It’s one of your best tools for getting sorted.

• How to make a budget
• Using the Budget calculator
• Things you need
• Where to get help
• Next steps

How to make a budget

To make a budget you first add up how much money is coming into your household (your income), then you add up how much money is going out (your spending), then you work out the difference.

The result is either money left over (a surplus) or not enough money to cover your spending (a deficit), The aim is to try and make a surplus so you have some spare money you can use to save for your goals or pay off debt.

Using the Budget calculator

Our Budget calculator makes setting a budget easy – it adds up all the figures for you. You can take two approaches to using the Budget calculator:

1. If you have anything left over from your pay packet once you've paid for essential items, take away the temptation to spend everything you earn by "paying yourself first". Just decide on an amount or a percentage of your income you're going to save each pay to improve your financial position. Then see how the rest of your budget takes shape.
2. Otherwise, fill out your budget so you can see where your money is going at the moment. Then see if there are any ways you can reduce your spending, or increase your income.

It may take time to get all the information you need to make a budget. But once you've done the hard work you can save it in My Sorted to review later.

Things you need

Here’s a list of the things you need when making a budget.

• A note of your day-to-day spending – keep receipts from your shopping to help you to do this.
• Your bank statements and bills – these will help show where your money’s going such as payments for rent, mortgage, hire purchase, credit cards, telephone, power and insurance.
• A list of annual costs such as vehicle licensing, medical expenses, gifts and holidays.
• A list of any money you get such as your pay, benefits or allowances.
• Details of any savings you have.

Where to get help

If you need help from a budget adviser contact the NZ Federation of Family Budgeting Services. You can find them in the White Pages under Budget Advice Services, or call 0508 BUDGET (0508 283 438).

You can also order or download our Sorted booklet 'Budgeting - A great way to meet your financial goals'.

Next steps

• Get information together on all your income and spending.
• Use our Budget calculator to make a budget then save it to My Sorted.
• Track your actual spending with our Money tracker.