Planning a Budget to reach your financial goal

1 February 2018

Well, we’ve got through the festive season and school holidays, and can now look forward to an exciting 2018. Many people will have made their New Year’s resolutions (and many of them have been broken already!) and for many of us dreading the payment of the credit Card bill after the Christmas blow-out the main resolution is to keep a tighter rein on finances this year. The other important reason to keep a check on spending is that we have seen banks tightening up their credit policies lately, with a much stronger focus on provable affordability, and good account conduct will certainly help when applying for a home loan.


So, with this in mind, how do you start to put a spending plan together and more importantly keep to it? The first thing to remember is that the budget is a general target of spending and not a rigid guide to be stuck to without flexibility. After all, there are many things that happen that can’t be planned for, and making allowances for unforeseen events should be part of any New Year goal-setting plan.


The second thing that you have to do is be honest with the figures that you are using. It is no good pretending that you earn more than is actually coming into the household or denying the amount of money you are spending on snack foods or takeaways. If you get additional payments or commissions through your work then treat them as a bonus but for the sake of budgeting you are better to work off your basic income figure. Likewise, you need to make allowances for those extra amounts spent during the week rather than just saying that the $250 you spend on the weekly grocery shop is all you spend on food and drink.


So how do you set the budget? Well, in our experience, the best thing to do is to look at your bank account and Credit card statements to take an average 3 month period (That generally doesn’t include Christmas holidays!) to work out what you are spending and where.


Some of the larger payments such as rent or mortgage, petrol, groceries and insurances are easy to calculate, but there are the additional expenses such as club memberships, holiday and recreation costs, doctors and hairdresser visits and friends and families birthdays which frequently take money out of the household account but can often get overlooked in annual expense calculations. Once you have established where your money is going currently it will be a lot easier to determine any areas of spending that can be reduced to increase the surplus that is remaining after all the costs have been met.  


When putting together your budget, remember to work it out in whichever time period suits your calculations. If you receive your income and do all your spending weekly, then your budget plan should reflect this. Even if you have some payments which are made annually or quarterly (such as rates or insurances), calculate them to fit in with the timing for your budget.


If you need some prompts, there are several websites that you can access to put together a budget plan to keep a check on your spending and to download tools to help you. (e.g or

If you’ve resolved to be better with your money this year or have a financial goal in mind, putting a budget plan together is the best first step to success.

Published In The Whakatane Beacon

This post was written by

John White - who has written 90 posts

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