Do you often find yourself guilty of overspending? You are not alone, but that doesn’t necessarily mean it’s a good thing. It can happen while you are grocery shopping, or when there is a sale on your favourite online store, or even while you are on vacation—you are not safe from spending more than you intended to. There would be cases where you would have to resort to using your credit card to cover the essentials, due to spending on unexpected purchases and other unforeseen expenses. What if you have loans to pay for? If this is the story of your life right now, then you may need to make time to learn how to handle your budget, finance and the loans you make in Australia.

Getting Your Finances Back In Check 

You may feel like your hard-earned money is gone too soon and you do not even understand how or why. If you think about it hard enough, there are probably fun activities, shopping, drinks and uber eats to blame. 

Here is what you need to do to get your finances back in check:

1. Assess the damage.

The fact that you are reading an article about budgeting means that you are ready to get your life back together. You need to look at your financial situation and review any outstanding debts. Remember any small loans that Australian-based lenders have provided for you, or any credit card debts that you should pay. This will give you a good idea of what your current standing is.

2. Identify the expenses.

The next thing you need to do is to write up a budget. You can do this by making a list of your monthly expenses and identifying which expenses can be reduced or completely removed. Once you have done this, you can now allocate some money for your debt payments. 

We will get into a more detailed budgeting guide in a bit.

3. Cutting back on your expenses.

The previous step was to make a list, so this step is telling you to stick to that list. Once you have identified which expenses you can reduce or remove, you should start making lifestyle changes that are in line with your new budget. 

For instance, instead of buying lunch or dinner, you can cook your meals at home or take lunch with you. You can also save on gas money by walking or using public transport once in a while instead of using your car every day. 

4. Confronting the debts and loans that Australia-based lenders have provided you.

Whether you have a short-term or a long-term loan, the borrowed money will make an impact on your lifestyle for a few months to a few years. This is why you need to budget your resources wisely.

If you have a loan, the longer you owe money, the more interest you are paying. You can save money by making advance payments. The faster you can pay off your loans and debts, the sooner you can start saving more money. 

Creating a Budget to Save More and Manage Loans in Australia

As promised, we are going to tackle a detailed step-by-step budgeting guide.

You are here because you are asking yourself “Am I saving any money?”. You are not sure if your expenses are just too high or maybe you are not earning enough money. 

Having a budget can answer these questions and it can even help you decide where to allot your hard-earned money.

How to Create a Budget

Here are the things you need to do to create an effective budget:

1. Choose a time frame.

You can either create a budget every month, every two weeks or even weekly. It is all up to you and your needs. A monthly budget may save you some time, however, a weekly budget may be more manageable, especially when you are just getting used to the concept of following a budget.

2. Identifying your fixed expenses.

These are your recurring expenses like rent, insurance, repayments for the loans that Australia-based lenders have provided you, and other known costs. Knowing your fixed expenses allows you to determine how much money you can allot to your groceries, wants, and non-essential purchases.

3. Identifying your variable expenses.

These are the expenses that do not have a fixed price. This includes your utility bills, groceries, etc. Your loan can actually fall under this category depending on your payment agreement with your lender, but normally it falls under fixed expenses.

4. Determine how much you earn.

Check your payslip to know how much you earn every month. You can subtract your fixed expenses from your monthly income to determine how much you can allot to your variable expenses. 

5. Recording your financial transactions as you go.

You can write down any income, expenses and purchases that you have made during your budget period. You can use a money management application available from the app store on your mobile phone. 

Recording your transactions as you go can help you make a conscious decision regarding your purchases. This also gives you a record to review where your money goes and also makes sure that you have money for repayments on the loans that Australian-based lenders have provided you in the past, or other debts that you may have. This practice will let you know if you were able to follow your budget effectively.

6. Analysing your transactions.

The previous step is necessary for you to move on to this step. Your records can help you better understand your spending habits; you have recurring bills and other essentials on your budget, recording your transactions can help you track where the rest of your money goes.

Analysing the record of your purchases can help you determine if you are spending too much and where you can cut costs. If you are tight on money, you should avoid spending on anything that is not essential for you, your family or your home. Analysing your spending can also help you make a financial forecast, we will get to that shortly.

Tip: If you still have some funds after deducting all your expenses from your earnings, use this to reduce your debt and start creating a financial safety net. 

Budgeting and Forecasting

Budgeting is when you create a spending plan for a certain period of time. This helps you guarantee that you have enough money to cover your needs and other expenses that may come along the way. This can ensure that you can repay the small loans that Australian-based lenders have given you, or any other debts that you may have.

The difference between a budget and a forecast is that a budget is a plan for where you want to go, while a forecast is an indication of where you are going.

For example, you may be creating a budget in the hopes of paying off your debts efficiently and saving money in the process. However, your forecast, based on your recent financial behaviour, may indicate that you like to spend money on trivial things, and saving money may not be an option anytime soon.

Forecasting your finances can help you identify which months you may be tight and which months you will have some extra money to spare. If you extend your budget into the future, you can forecast how much money you can save for important purchases, such as a new car, a vacation, or even your first home.

It is always a good idea to prepare for the worst by saving some money for an emergency fund. An emergency fund serves as your buffer while you’re still dealing with the unexpected expense or unemployment.


Handling your budget, finances, and payments for loans and debts will take a lot of willpower. You need to make lifestyle changes if you genuinely want to get your finances back in check. Creating a budget is a start, but consistently following it is what will get you somewhere.

The opinions expressed in the Blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product.  It is only intended to provide education about the financial industry.  The views reflected in the commentary are subject to change at any time without notice.

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