Living on a budget

Living on a budget feels like the money police are constantly hanging around watching how you spend your money. They question you when you buy fun things like doughnuts, and curse you when your bills are late. Well, you can tell the mo-po to take a hike because we’ve got some tips to help you manage your funds. If you're still struggling, there are things you can do.

Read this if:

  • You’re struggling to live on a budget
  • You’d like to limit your spending
  • You have trouble prioritising when it comes to spending money on things
ten Australian dollar

How to live on a budget

When you’re living on a budget, it’s a pain having to think about how much money you’re spending all the time. Fortunately, there are some simple steps you can follow to get control of your money and avoid any cash-tastrophes: 

  • Choose the cheap option. When you go into a shop, you’re usually presented with a variety of products. There’s a spectrum of products, ranging from the expensive, brand-name option, down to the generic or on-sale option. When living on a budget, go with the cheap option. 

  • Learn to say ‘no’. Ergh, it’s true, saying ‘no’ isn’t fun. But it is a handy skill to have, and it’s especially important when it comes to budgeting. If your mates are asking you to go out with them and you simply can’t afford it, opt for a night in front of the telly instead.

  • Avoid friends who spend. Everyone’s got different amounts of money to spend. If you’re going through a tough time managing your funds, avoid hanging out with friends who spend liberally. You don’t want to find yourself being unknowingly sucked into their spending sprees.   

  • Figure out what’s most important. You can try all you like to argue that a Friday night out is more important than paying your electricity bill, but when you get home and your lights and fridge are out of action you’ll be singing a different tune. Prioritise – pay for the essentials first and always ask yourself: “Do I really need this?”

  • Use tools to keep track of your money. There’s a whole bunch of apps and tools out there to help you keep track of how much you’re spending. TrackMySpend is just one example of these. Figure out how much you can spend each week and use the apps to help you stick to it.  

  • Spending heaps of money on food? Food is a huge cost. Instead of eating out all the time, learn some great recipes, cook at home and buy in bulk where possible. When you do your shopping, opt for the Homebrand products because, let’s be honest, they all taste the same anyway. 

  • Put money aside. Find or make an indestructible money box that you can’t open, not even with your Kung Fu grip. Or open a savings bank account that you never touch. Put spare change in there whenever you find some, or commit to making weekly $5 donations. It will add up before you know it, and then you’ll have a nice, little emergency fund. 

  • Make a list of Friday-night activities that don’t involve spending a truckload. X-box? Putt-putt? Picnic by the beach? Bike ride? Free gigs? Camping? The list is endless.

  • Only spend the money you’ve got. Instead of paying using credit, use real-life money that you actually own right now. Things can get out of hand really quickly when paying on credit, not to mention the insane interest rates. 

  • Consider buying second hand. Clothes, furniture, and even cars can all be bought second hand. There’s some really great second-hand stuff around the place, so if you can find the energy to wade through it all you might well end up with some great new purchases.

  • Manage your habits. Three enormous money suckers: alcoholcoffee and cigarettes. Try to cut back on these as much as possible because even if they do play a big role in your life, they’re not essential. 

Still struggling?

If you’re still struggling with living on a budget and it’s starting to impact negatively on your life, you might need to think about looking for different employment, or cheaper accommodation. Otherwise, it’s a good idea to have a chat to someone you trust to get a fresh perspective and to talk through some other approaches to budgeting that could work for you.

What can I do now?

Last reviewed: 26 August, 2015
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