Planning and Control

A budget is one of your best tools for reaching your goals – whatever your age or stage in life. It’s a plan of what money you expect to receive and how you expect to spend it. * Who should have a budget? * How to make a budget * Use the money planner * Things you need * Getting help * Tracking your spending * Making the most of your income Who should have a budget? Tip: A tight budget is harder to stick to. Be realistic. Everyone can benefit from a budget. It’s not just for people who are having trouble making ends meet.

If you’re spending less than you earn, use your budget to work out how much you can put aside each pay to improve your financial position. We call this ‘paying yourself first’. If you’re spending more than you earn, use your budget to see where your money is going. Then see if there are any ways you can cut your spending or increase your income. Rick and Heather Mawby The Mawby family makes sure their money goes a long way. Read more Back to top How to make a budget Add up how much money is coming into your household (your income), and how much is going out (your spending), then work out the difference.

The result is either money left over (a surplus) or not enough money to cover your spending (a deficit). Aim for a surplus so you have some money to save for your goals or pay off debt faster. Back to top Use the money planner Making a budget is easy with our money planner. Once you’ve set your budget you can save it in My Sorted to review later. You can save more than one budget and even share it with friends and family. The NZ Federation of Family Budgeting Services also has a free budget worksheet you can download. Back to top Things you need Your budget needs to be accurate or it won’t work.

Give yourself time to get all the information you’ll need, including: * A record of your day-to-day spending. Keep receipts from your shopping, and gather up bank statements and bills from the last three months. These will show regular expenses like rent, mortgage, hire purchase, credit cards, phone, power and insurance. * A list of annual costs. Think about things you pay for less regularly like vehicle licensing, medical expenses, gifts and holidays. * Your income details. A list of any money you get such as your pay, benefits or allowances, NZ Super or interest earned on savings. * Savings. Details of any regular savings you make.

Back to top Getting help If you need help making a budget, or if you are having trouble making ends meet, contact a budget adviser. Back to top Tracking your spending Once you’ve set a budget you need to see how it’s working in reality. Keep a spending diary or use an online tool. Find out more about money tracking. Back to top Making the most of your income Budgeting isn’t just about watching your spending. How much you earn also affects whether you have money left over for saving or paying off debt. Why you need to grow your income If your income doesn’t grow you’ll effectively earn less each year just because of inflation.

So when you’re planning your finances, don’t forget to include goals for growing your income. Know what you’re worth Do you know what someone in your position with your experience and skills should be earning? Does your employer? To find out what you’re worth, read the situations vacant in your local paper or check out the online job sites. You could even contact some recruitment agencies to find out what a similar job to yours is currently paying. You can also find broad salary information for different types of jobs on the Careers New Zealand website.