Budgeting isn't just for bills

The thing about budgeting is that the word itself just feels restrictive. Thoughts of counting the cents and saying no to doing fun things with friends come to mind.

But when done right, budgeting can be the total opposite – giving you a plan for your money and making sure you can still spend on the things you want to.

Creating a budget was easier than I thought it would be, and after a few tries, I've found a way to make it work for me. This budget means I can afford to live large – hiking trips, clothes from my favourite ethical brands, supporting my community and nights out with my friends, all completely guilt-free.

Incorporating luxuries or ‘wants’ into your budget makes spending (and saving!) sustainable. And in my experience, a budget only works if it can be maintained over the long term.

Budgeting for my bills and non-negotiables came first

To kick things off, I started with my non-negotiables, like my bills, rent and car costs. After all, they have to get paid (it’s in the name!).

I divided the yearly total by 26 (I’m paid fortnightly, so this is the number of paydays in a year) and then set up an automatic payment of this amount to go to my bills account each pay. The bill is then automatically paid when it’s due.

My non-negotiables account has a picture I took of a calm beach – it’s how I feel when I know my bills are covered.

My budget still lets me spend

Too often we sit down to create a budget and overestimate the amount we can save, swearing we won’t spend a cent on anything other than necessities during this pay period.

And then the opposite happens – we splurge on anything and everything, ending up with no money left by the next payday. That may be because we’re feeling deprived by the restrictions we’ve put on ourselves!

The key to my budget is that it still lets me spend on my ‘wants’ – there’s just a plan for that spending.

Consider the emotional return to decide which luxuries make the cut

It started with writing down the luxuries that I want to have in my life – adventures, sustainable fashion, gifts, margaritas and supporting causes I care about.

I thought about how much they cost, and how much return on investment I receive. It’s not always about the money! Taking into account the emotional benefits is key – including the anticipation, the event or activity itself, and the memories and connections it creates, as well as the financial, time and energy costs.

I created accounts called things like 'Adventures', 'Gifts’ and 'Fun stuff'. I added pictures of things I love as backgrounds to make each one more real. Seeing money grow towards my favourite things helps me to stay on track.

It may be a luxurious budget, but there’s still a limit

Whatever amount you’re working with, it’s likely you’re spending something on luxuries or wants – whether it’s as little as a $5 coffee each week or $100 a week on lunches, clothes and concert tickets. The key to this method isn’t how much you spend, but planning for that spending.

I used the budget planner to look at how much I was already spending in each category, then used these numbers to set up automatic payments to my different bank accounts.

Whenever I want to spend from a ‘wants’ account, I just transfer the money to my everyday account and spend on my card as normal.

It’s super easy to maintain and flexible enough to adapt when I need to. The more I saw my luxuries accounts grow, the more motivated I was to rein in spending that I didn’t really care about – goodbye fancy brands at the supermarket, hello in-season fresh produce! Over time, I refined my ‘needs’ by reducing my mobile plan here, cutting out bought lunches there. I was then able to up my luxuries budget, and of course my savings!

This may be cliché, but budgeting changed my life!

Before I started budgeting, I never knew where my money went. All of a sudden it would be the end of the week and my pay was already gone. I had no savings – I wasn’t even buying big items. My money was just leaking away on the day to day. I felt broke, even though I was working full time and earning enough to get by.

A waterfall begins with only one drop of water

I’m not going to lie. I started small as I saved for luxuries, with whatever amount I could spare after the necessities. So that meant $20 a fortnight for adventures, $10 towards fun stuff. It took a couple of years to feel like there was a sustainable buffer saved up for each of my chosen luxuries.

That sounds like a long time, but life moves quickly when you’re not looking. I was also fortunate enough to keep learning and freelancing, and to change jobs, which meant steadily increasing my income over that time. Because I knew what I needed to cover the basics, extra income went straight to my luxuries accounts, which was super satisfying and helped things grow faster.

It took me a while to start – but as they say, next year you’ll wish you started today, and three years down the track I can confirm that I am hugely grateful I started – however small – when I did.

A budget for people who don’t want to budget

Honestly, I never thought I could budget, and yet here I am – with a successful money system and feeling pretty damn smug about my upcoming hiking trip to Milford Sound that I paid for from my adventures account, and the designer wardrobe bargain I copped for a last season jacket I am obsessed with.

What luxuries do you want in your life? Our budget planner can help you make them all part of your plan.