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  3. Managing money

Managing money and budgeting

Different families handle budgeting and money management in different ways. But the general goal of money management is a yearly, monthly or weekly picture of what you need to spend and what you have left over.

Benefits of budgeting

Budgeting will help you:

  • spend your money wisely on the things you must have – these are your needs
  • save money for the things you dream about – these are your wants
  • set aside money for unforeseen expenses
  • stop accidental overspending.

Working out how much money you need for everyday essentials like food, housing, utilities like gas, electricity, phone and water, transport and medical services helps you make sure you have enough for unexpected expenses and emergencies.

After you’ve accounted for the essentials and the emergencies, the aim is to have money left over to buy some of the things you want, as well as to save for your long-term goals.

Having a plan for managing your money will help you and your family avoid getting into debt. It can also help you get on with being a family, rather than spending too much time on financial stresses.

The key is sticking to the rule – never spend more than you earn.

Getting started with budgeting

One way to start is to make a table listing what you have and what you spend or owe. This is called a budget.

A long-term budget will include the following.

What you have

  • Your income per week, fortnight or month
  • Bank accounts
  • Superannuation statements

What you spend

  • Average bills per week, fortnight or month, keeping in mind that some months you might spend more than others
  • Mortgage or rent payments
  • Any other money you spend

What you owe

  • Your credit card payments
  • Any other debts

Try to budget a specific amount for savings, fun, leisure and personal expenses and then stick to it (which is usually the hard part!).

Money management: working out what you spend

One of the hardest things about making a budget and managing money can be keeping track of what you spend. Looking over previous bills can help you estimate what you spend over a week, a month or even a year.

Here are some of the spending items that you might want to include in your family’s money management plan:

  • house repayments or rent
  • council fees and land taxes
  • food
  • utilities – gas, electricity, water, phone and internet
  • home maintenance and household goods
  • school or tertiary study fees
  • school uniforms, textbooks and stationery
  • medical and dental fees
  • credit card and personal loan repayments
  • health, car and household insurance
  • car repairs and petrol
  • public transport
  • personal items like clothing and haircuts
  • holidays
  • other things like gifts and special treats for you and your family
  • entertainment. 

Money management: working out what you want to save

Making a simple savings plan means that you’ll be more likely to reach your goal of spending less than you earn, which adds up to saving money.

Here are some steps to saving money:

  • Decide what you’re saving for. What are your goals? Give yourself plenty of time – saving can seem to take forever.
  • Think about how long it will take to reach the goals you’ve set. Be realistic and you’ll avoid feeling pressure.
  • Review the pros and cons beforehand so that you know what you’re getting into with your savings plan and what effect it will have on your life.
  • Speak to your bank or financial institution if you want more advice.
  • Look into other options, like asking your employer to split your salary payment, so some of it goes into a separate savings account.

If there are parts of your plan you’re unsure about, seek advice or double-check the facts before you go ahead.

You can use the Australian Government Financial Information Service. This service is free and available to everybody. Or you could look into choosing a private financial adviser.


Family financial management tips


In this video, financial expert Paul Clitheroe offers tips to help you handle the financial burden of raising children. The video also covers budgeting, planning, prioritising needs over wants, and making sacrifices to keep income greater than or equal to expenses.

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