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Budgeting for living costs

 Quick Summary

A budget shows how much money you have coming in (income), and how much money you have going out (expenses). Budgeting helps you to know what you can afford to pay in rent or mortgage costs. The average cost of living for a person goes up a little bit each year. When you want to live in your own home, you need to work out what your living expenses will be for essential things like food, housing, electricity, health, telecommunications, clothing and transport. Rent or mortgage costs will be a large part of your living expenses. It is important to understand how to manage and be in control of your money. A budget is a plan for saving and spending money....

You can choose to:


Organising your budget

Let’s get going with organising a budget.

It is helpful to look at the money coming in (income) and going out (expenses) across a whole year.

List all your income. This could be wages from full time, part time, or casual work, pension, government benefits, child support payments and money from investments. If your income regularly changes, make an estimate based on your past 3 months of wages.

Work out what your living expenses will be every fortnight. To do this, look at your bank statements, regular bills and receipts. Also investigate rental, power and content insurance amounts. Add up your regular expenses for items like rent, food, phone, internet, electricity, transport, insurance and medical expenses. You may need to use your best guess for irregular expenses like clothing and haircuts. Finally, budget a regular amount for savings.

For expenses that must be paid every month, quarterly, and annually, multiply the highest amount you expect to pay for the bill by the number of times you will receive a bill in a twelve month period, then divide this number by 26. For example, if your power bill is $350 and will come every 3 months, this is 4 times in a year. $350 multiplied by 4 equals $1400, then divided by 26 equals approximately $54 per fortnight.  This will give you the amount to put in your fortnightly budget for these items.

If you have any money left over from one fortnight save it. Budgeting to make savings is important. You wish to save for unexpected expenses or a holiday, for example.

Ask for as much support and advice as you can to make sure that you have budgeted enough to pay for your expenses.

Now you have all of your income and expense amounts, subtract your total expenses from your total income. If you have more expenses than income you need to act quickly to change this. Check your budget to make sure you have got all the amounts right and look at your expenses to see if there are any you could reduce. What could you cut out or cut back?

If you have more income than expenses you are set to go with your budget.

Print your completed budget plan and keep it somewhere safe. Remember to use it. Before you go to the movies or the supermarket, check your budget to see how much you can spend and then stick to that amount.

If you are on a low income or have never budgeted your money before, starting a budget may be tough. It does get easier though because you will get better at it the more you do it.

There are also people who can help you for free with budgeting such as financial counsellors.

Budget and monitoring services

Beware of budget plans sold by people who claim that they can help you pay off your loans faster. This kind of service could be costly and often these budgets are impossible to stick to.

People use money two ways:

  1. They buy things they need or want now.
  2. They save for things they may need or want later.

It’s not about how much money you have, but how you use your money.  It is all about the choices you make.

The Difference Between Needs and Wants

Here’s a good rule about money:  It is very important to make your needs come first. That’s why it is important to know the difference between your needs and your wants.

Before you start planning how to use your money, let’s be clear about the difference between needs and wants. A need is something you must have to survive, like a place to live or enough food to eat. A want is something you might like to have but don’t need as an essential item right away. You can save for something you want and have it later.

If you are on a low income and really must get a loan for something you need, you may want to consider contacting the No Interest Loans Scheme (NILS). This scheme offers interest free loans to Tasmanians on a low income, for the purchase of essentials including household, education, medical, dental, or car expenses.

Remember, to take out a loan (a debt) you must be able to show that you have enough income to pay it back. If you are on a low income, make sure that you only take out a loan as a very last resort.

Good luck with budgeting for living costs and saving for that special something or someone.


Get a Budget Planner that will work for you

Download the FINDING YOUR WAY Budget Planner.

Find out if you are receiving all of the financial benefits you are entitled to.

You may be able to receive rent assistance, a low income Health Care Card and the Mobility Allowance (if you cannot use public transport without assistance because of disability, illness or injury) and transport access scheme concessions and benefits.

Check Australian, State and Local Government benefits and concessions to find out what you are entitled to.

SERVICE RESOURCE – Centrelink has an on-line payment FINDER tool that is easy to use or you can make an appointment at a Centrelink office.




SERVICE RESOURCE – The Tasmanian State Government publishes a Discounts and Concessions Booklet. It can assist you with the costs of accessing many essential services. You can also ask for one at a Service Tasmania shop.

SERVICE RESOURCE – For free budgeting assistance and financial counselling, contact Anglicare on 1800243232 or Colony47 on  1800-265-669.

If you need to get a loan, consider the No Interest Loans Scheme (NILS), a scheme offering interest free loans to Tasmanians for the purchase of essentials.

Have a look at this excellent Finding Your Way – Getting Ready to Move booklet.


Here you can find a simple list of the best actions to take if you are interested in this topic:

1 . Work out what your income is.

Consider wages from full-time, part-time, or casual work, a pension, government benefits, child support payments and money from investments.

2 . Put your income amount/s into your budget planner.

3 . Work out what your expenses will be.

Look at your bank statements, bills, and receipts.

4 . Put your expense amounts into your budget planner.

TIP: If possible you shouldn't pay more that 40% of your weekly income on rent or mortgage payments.

5 . If you have some money left over, you are good to go with your budget and saving plan.

6 . If you have more expenses than income, work out what cut backs you can make.

Perhaps less takeaway dinners or cups of coffee?

7 . If you need assistance to Budget, make an appointment with a free financial counselling services through Anglicare or Colony 47.

8 . If you are renting, save money to pay for your bond and connection fees for services like electricity, gas, and phone and internet.

The maximum amount you will pay for bond is equal to 4 weeks of rent.

9 . If you are buying a home, save a cash deposit of at least 5% of the purchase price of the home.

10 . Find out what community assistance you are eligible for that will help with the costs of bond, moving and rent.

If you’re on a low income contact Housing Connect on 1800 800 588.

11 . Find out what entitlements you are eligible to receive.

If you already receive a benefit, it usually increases when you live independently.

12 . Keep track of your spending every fortnight.

13 . Save to buy the things you need and want.