A budget isn’t just looking at how much you spend each week, but it also looks at how you spend your money. Sometimes the small purchases (e.g., a coffee, trip to the dairy, or just popping to the supermarket to pick up one thing) can really make up more of your weekly spend than you realise. Planning is the best tool that you have to understand where you are spending your money and it can help you make more informed choices.

Having a budget is especially important for students because you tend to live on a low income, all while dealing with the demands of studying, working, and learning how to manage your finances. But budgeting is a tool that can help everyone, as it can empower you to take control of your spending and achieve your financial goals, big or small.

The first step to creating a budget is figuring out what you actually spend each week. All of the small purchases add up, so it’s important to understand what your spending habits are like, and where you may need to make some changes.

There are many different ways that you can figure out how much you generally spend, so it’s about finding what works for you. You can use your bank statements to go back 2-3 months, and add up how much you spent on each expense (you can use a budget template to help figure out how to categorise each expense). This is the most time consuming part of putting your budget together, so make sure to use technology to your advantage and use a spreadsheet to add everything up for you.

Once you have calculated what your spending has been over the last couple of months, you can figure out what you have spent on average per week (e.g., if you calculated expenses over 3 months, then you divide the total by 12 or 13). It is easier to process your expenses when you see them on a weekly basis, otherwise it can be difficult to get your head around the numbers.

Now that you have your average weekly spend set out, you can start to look at your spending and assess where you are doing well and what you may need to cut back on. Understanding your habits means that you can set up a more realistic budget that you will be able to stick to long term and create better habits in the future. If you get takeaways three times a week, then it’s not realistic to cut back to having them once a month – you’ll find it hard to stick to, and might give up. It’s okay to have those stricter goals in the long term, but your first budget needs to be realistic so you can get into the habit of being mindful about your spending.

You know you need a budget, you know what your spending habits are, and you know that you need to be realistic. Now what? Now you plan your budget!

There are heaps of budgeting tools online that can help you put together your budget. We recommend the UCSA budget template or the budgeting tool on sorted.org.nz.

The important thing to remember is to budget for your essentials first (e.g., rent, power, internet, groceries, transport, insurance), then you can allocate funds for the other expenses (e.g. takeaways, clothes, alcohol etc.). If you are able, make sure to leave some room for the things you like to do, as it is hard to stick to a budget that is overly restrictive and makes you feel horrible about budgeting.

If you would like to focus on saving for an emergency fund or for a particular item and if you have an excess in your budget, it can be helpful to put that excess into a savings account every time you get paid. This means the money is out of your main account and you are less tempted to spend it.

For example, if you have met all of your expenses and have $10 leftover in your budget each week that you put into your savings account right away, then over the course of the year you will have saved $520 (plus any interest that accrues).

It’s a small step, but it can help you get that much closer to your goals, or help you meet any unexpected expenses that come up.

If you are struggling to plan your budget, then there are a few strategies that you can use to help you along with the process:

1. Write down your goals – what would you like to achieve by having a budget? What is your “why”?
2. Have a chat with your friends about budgeting – see what they do, and what has worked for them. Budgeting doesn’t have to be isolating, and it can help you stay on track if you don’t feel alone.
3. Chat with a professional – there are heaps of free budget and financial advice services available. We recommend checking out MoneyTalks, which has digital budget resources, free online budget advice, and can point you in the right direction if you want to speak with someone in person. This is also a great option if you want some help with things like debt management or navigating WINZ processes.

It’s great that you have a budget, but now you have to stick to it. This seems easier said than done, but with a little bit of planning and routine, it can be super easy!

Tracking your spending is really the core of what budgeting is all about – you need to keep track of things so that you know whether you are sticking to the plan. There are heaps of different ways that you can track your spending, so it’s important to find what works for you. You can use a spreadsheet (don’t forget to use online services like OneDrive and Google Sheets so you can check your budget on-the-go), a budgeting app, track things in a notebook, or any other method that works for you. As long as the numbers add up, then whatever works for you will work for your budget.

Tracking your spending accounts for the fact that you often won’t spend the same amount each week on your expenses; sometimes it’ll be more, sometimes it’ll be less. If you are tracking what you spend in each category, then you can account for the differences in spending week-to-week because it all evens out over time.

We recommend taking some time to think about what you require from your budget tracking. Do you want flexibility? Ease-of-use? Synchronisation with your bank accounts? If you want minimal set-up and ease-of-use, then finding a budgeting app or website is generally the easiest option. However, you will need to consider whether you like the user interface, whether the free version gives you the features you want, and what information you are comfortable sharing with the app or website developer. The most basic option is using a spreadsheet, but there can be a steep learning curve if you’ve never set up your own equations before.

It can take a bit of trial and error, but it’s important to persevere and find what works for you.

Budgeting doesn’t have to be a difficult, isolating, or shameful experience – you can still have fun, socialise, and not spend every free moment planning. It just takes a small amount of time now to reap the benefits for many years to come. Budgeting is a skill and being frugal is a habit, so being at uni is a great time to learn how to use these to your advantage.

UCSA Budgeting 101 Guide