How To:

Create a Budget that Works

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Step 4: Get the Right Structure

Now, you might be thinking, “The things that blow my budget are things I have to spend money on, like my car blew up, or the kids needed to go to the doctor, or the dog got a tick.”

Were those things in your budget?  They should’ve been.  You might not get the number right every year, but estimate those expenses over ten years and divide by ten when completing your budget.

If it was in your budget, where did the money go?

Further, how can you get some alarm bells to ring when you are close to blowing the budget?

Most people realize they have spent more than they wanted to after the spending is already done.

Your budget has to be integrated into how you live your life.  The best way to do that is through the structure amongst your bank accounts.

Typically, you want to split your expenses into week to week living, regular bills, and irregular expenses.  This simple table shows how you might split your expenses.


So, all you need to do now is make sure that this is what you actually spend.  You may try an app or a spreadsheet, but these typically won’t tell you that you have overspent until the spending is already done.  The best way I have found is to employ something similar to the “envelope system”.  Set up your accounts like this:


This system will give you immediate feedback on if you are sticking to your budget based on the idea that you can’t spend money that is not in your account.  You know you can spend what is in your account, but anything more means that you have exceeded your spending assumptions. 

With internet banking these days, you can always get the money out of your savings/offset account, however you know if you spend out of that account then that was money that you had earmarked for your renovation, holiday, children’s education, car change over, etc. 

Step 5: Monitor


Not everyone needs this step, but for those who really want to get this system firing, the best thing to do is start tracking and monitoring what is going on.  There are various spreadsheets and apps that can do this for you.  I use accounting software that gets data feeds from my bank.

Monitoring has the advantage that you can create a much more accurate budget over time, and if you monitor something it tends to become a bigger focus for you and naturally will improve.

Step 6: Get The Right Help

GPA Financial Planning offer a free two hour consultation which will help you learn how you can take these steps and detail any other actions that will specifically help you to save money and achieve your goals.

Book an appointment

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