Once you know what you own and what you owe, the next step is to create a budget.

A budget is simply the financial representation of how you live your life, showing what you choose to spend money on. It’s not about trying to spend as little as possible, but trying to get an accurate gauge of how much you need to live the lifestyle you want and a tool to take control of your financial affairs.

It’s a good idea to first look at what your family has historically earned and chosen to spend money on, and what regular savings were made. This will give you a good guide to how you lived in the past and will help you work out what resources you will need to maintain your lifestyle.

Once you have a clear picture of your financial habits, you can begin to categorise your expenses. Start by separating into ‘income’ and ‘expenditure’. Income can be your income, your spouse’s income, bonuses and overtime, rental income, investment dividends etc.  Expenditure can be such things as housing (rent/mortgage), food, transport, cards, insurances, children, pets, entertainment, gifts, holidays etc.

Recommended Resource

If you aren’t sure where to start, ASIC’s MoneySmart website https://moneysmart.gov.au/  has a wealth of information and a template budget you can use. As well as budgeting, there are money management tips and advice on how to reach your savings goals.

Once you have a clear outline of what you’re spending, you can then set your priorities. An example is knowing and agreeing on what your children’s expenses are, and working out how these expenses will be funded.

This excerpt is from ‘Breaking Up Without Breaking Down’ – Dr Tina Sinclair, Tricia Peters

Marguerite Picard which can be purchased via Amazon – https://www.amazon.com.au/Breaking-Up-Without-Down-Preserving/dp/0992317665

Please contact MELCA – https://melca.com.au/ for more information and to book a free 15-minute information session.