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Everyone needs a plan to get through these days, and ‘budget’ doesn’t have to be a dirty word. It’s just a simple plan showing what money we expect to receive and how we expect to spend it. It's a way of steering our money and staying in control. A budget is one of the best tools for getting the most out of our money and getting ahead.

Who should budget?

Everyone can benefit from a budget – not just people who are having trouble making ends meet. It can mean the difference between feeling in control and being able to plan ahead, versus always wondering where our money went and going into overdraft between paydays.

Spending less than is coming in? We can use a budget to work out how much can be squirrelled away each payday. We call this ‘paying ourselves first.’

Spending more than is coming in? We can use a budget to see where that extra money is going. We can also see if there are any ways to spend less or earn more.

A good budget makes managing money and reaching financial goals more of a certainty. 

Case study: Rick and Heather Mawby

The Mawby family makes sure their money goes a long way.

Read more

How to build a budget

To create a budget, we simply add up how much money is coming into the household (our income), and how much is going out (our spending), then work out the difference.

The result is either money left over (a surplus) or not enough money to cover our spending (a deficit). The aim is to get a surplus so we have some money left in our pockets to save for our goals or pay off debt faster.

Use a budget planner

Making a budget is easy with the Sorted budgeting tool!

Try the Sorted Budgeting tool

What we’ll need to build one

A budget needs to be accurate or it won’t work. We can’t fudge it! Here’s what you’ll need.

  • A record of day-to-day spending. Receipts from shopping, and bank statements and bills from the past three months. These will show regular expenses like rent, mortgage, hire purchase, credit cards, phone, power and insurance (as well as the little things it’s easy to forget about – like parking fares or ice creams from the dairy).
  • A list of annual costs. These are things you pay for less regularly like vehicle licensing, medical expenses, gifts and holidays.
  • Income info. Any money such as pay, benefits or allowances, NZ Super or interest earned on savings
  • Savings. Details of any regular savings you already have
Budgets need to breathe! A tight budget is harder to stick to, so it’s important to be realistic about how much we need. And everybody needs some fun money! (Coffee? Concerts? Cars? We’ve all got purchases that make us feel good.)

Getting help

Need help with making a budget or making ends meet? Reach out to MoneyTalks on 0800 345 123 for personalised help.

Tracking spending

After setting a budget it’s important to see how it’s working in reality. Try a spending diary or use an online tool or smartphone app. Then you can adjust the budget as needed.

Guide to money tracking

Making the most of our income

Budgeting isn’t just about watching our spending. How much we earn also affects whether we have money left over for saving or paying off debt.

Why does income need to grow?

If our income doesn't grow, we’ll effectively earn less each year just because of inflation. So part of our plan needs to include goals for growing income, too.

Knowing what you’re worth

Online job sites and salary survey reports will show what someone in your position with the same experience and skills should be worth. You can also contact recruitment agencies to find out what similar roles are currently paying.

The Careers New Zealand website has broad salary information for different types of jobs.