Managing a Household Budget

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The key to managing a household budget is working out:

  • How much money you have coming in
  • What things you spend your money on
  • Which expenses are essential

Then it's up to you to work out how, where and when to spend your money. Here are some ideas and tips to help you.

Essential and non-essential items

As well as the items that you absolutely have to pay regularly, such as rent, bills and food expenses, allow some extra money for emergencies such as dentist bills, car repairs and other expenses that occasionally arise.

If you're running low on money, it's time to reduce your expenses for a while. The easiest way is to cut out some of the non-essential items or luxuries.

However, it's unrealistic to think that you only need money for the essentials and that you can get by without any of the fun stuff for very long. Everyone needs the occasional treat, so allow some space in your budget to reward yourself for your hard work.

Managing bills

Some services, such as the telephone, have the option of monthly or quarterly billing. Spread your bill periods so you don't need find a huge sum of money to pay off all your bills every three months - pay some monthly and pay some quarterly.

Pay your bills, especially your rent, close to or on time. If you don't pay your rent on time, it will lead to disputes with the landlord or agent. If you leave your bills outstanding, you may incur a penalty and it may even affect your credit rating.

If you're having trouble paying a bill, call the company you owe money to and explain the situation. They are usually happy to give you a bit more time to pay or enable you to pay smaller amounts, frequently.

Shared expenses

If you're living with other people, you have to decide which expenses will be shared (such as water and power) and which will be separate (such as the telephone if one housemate makes more mobile or long distance calls), and you'll have to decide how to track these and make sure everyone pays their fair share.

Use a kitty to manage shared expenses where each housemate puts in an agreed amount of money each week to cover regular household expenses like food, milk and toilet paper. You can also put extra money aside for shared bills such as water and electricity.

Online tools and resources

The following online resources can help you get started with planning a budget:

  • Reach Out!'s All About Managing Money (new window) page has advice on managing money and bills in a share house, and more general advice on planning to move out and balance work, education and moving out of home.
  • MoneySmart's Budget Planner (new window) can help you make smart choices about your personal finances. 
  • MoneySmart Rookie (new window) has heaps of tools and advice that explain financial management techniques in an easy to understand way.