How to Set Up Your BudgetRite Budget

1. Start With Your Income

Start with the money that actually reaches your bank account.

BudgetRite is designed to show your household cashflow, so enter your after-tax income rather than your gross salary.

If you are paid:

• Weekly: enter your average weekly income.
• Fortnightly: enter your average fortnightly income.
• Monthly: enter your average monthly income.
• Irregularly: calculate an average using your income over the last three months, or another period that better reflects your normal circumstances.

If you and your partner both earn an income, enter each income separately where BudgetRite allows you to do so.

The objective is to establish a realistic starting point for the money available to your household.

2. Enter Your Loan Repayments

Review your bank transactions and identify the regular repayments being made from your household accounts.

Enter each repayment into the appropriate BudgetRite category, including:

• Home loan repayments
• Personal loans
• Car loans
• Other loan repayments.

Make sure you enter the actual repayment amount and select the appropriate frequency—weekly, fortnightly, monthly or otherwise.

If your repayment has recently changed because of an interest-rate change, use the current repayment amount rather than an older figure.

3. Credit Cards

Credit cards need to be treated differently depending on whether you carry an ongoing balance or pay the card off each month.

Do You Have Ongoing Credit Card Debt?

If you have an outstanding credit card balance that you are progressively paying down, enter the amount you regularly pay towards reducing that debt.

This should be treated as a debt repayment rather than an everyday living expense.

Do You Pay Off Your Credit Card Each Month?

If you pay your credit card balance in full and use the card for everyday spending, do not double-count those purchases in BudgetRite.

Instead, transfer the money from the appropriate BudgetRite account to your credit card as you spend.

For example, if you spend $150 on groceries using your credit card, transfer $150 from your Living Account to the credit card.

If you use the credit card for household bills such as electricity, transfer the money from your Bills Account.

For example, if your council rates or car registration are charged to your credit card, transfer the corresponding amount from your Bills Account to your credit card.

Why Reconcile Your Credit Card Weekly?

We recommend doing this at least weekly rather than waiting until the end of the month.

If you wait 30 days, you may have dozens of transactions to remember and reconcile. Weekly transfers make the process much simpler and ensure your bank-account balances continue to reflect your BudgetRite allocations.

The principle is simple:

When you spend money on the credit card, make sure you transfer the monies from your corresponding bank accounts weekly.

4. Enter Your Living Expenses

This is one of the most important sections of BudgetRite.

Review your banking app or recent bank statements and work through your normal household living expenses.

Where an expense varies from month to month, use an average based on the last three months rather than relying on a single month.

Work through each BudgetRite category and enter the amount you would normally expect to spend.

Don't try to make the numbers look better than they really are.

The purpose of BudgetRite is to understand your actual cashflow, not to create an idealised budget that you are unlikely to follow.

If you normally spend $300 a week on groceries, enter $300. If you discover later that your actual spending is different, you can update the figure.

Your First Budget May Not Be Perfect

Don't worry if your initial Living budget needs adjustment.

Your first BudgetRite budget is a starting point. Once you begin using the corresponding bank-account structure, your actual spending will give you better information about what your household genuinely requires.

For many people, it can take one to three months to refine their Living budget.

5. Enter Bills and Utilities

Some household expenses occur monthly, while others may only be paid quarterly, annually or irregularly.

For expenses such as:

• Electricity
• Gas
• Water
• Council rates
• Insurance
• Car registration
• Other regular household bills

look at your recent bills over a longer period—ideally 12 months where available.

Calculate an average annual amount and convert it into the appropriate BudgetRite frequency.

For example, if your electricity bills total approximately $2,400 over a year, you could allow approximately $600 per quarter.

This is more reliable than budgeting based on the most recent bill, particularly where seasonal usage causes significant variations.

Home Maintenance and Repairs

Not every household expense occurs every month.

Home maintenance, appliance replacement and unexpected repairs are good examples. You may go several months without spending anything and then receive a large bill.

Your budget should therefore include a reasonable contingency for expenses that are likely to occur over time, even if you have not incurred them recently.

The same principle applies to:

• Car repairs and maintenance
• Dental expenses
• Medical and doctors' bills
• Appliance replacement
• Other irregular household expenses.

You may not spend the full allowance every year. That's okay.

The purpose is to recognise that these expenses are part of the cost of running a household and should not automatically become financial emergencies when they occur.

6. Savings, Investments and Goals

If you regularly transfer money into savings, investments or other financial goals, enter those amounts into the relevant BudgetRite sections.

This might include money being set aside for:

• Holidays
• Renovations
• A major purchase
• Emergency savings
• Investments
• Other future goals.

Savings Goals and Future Events

BudgetRite can also be used to model planned future expenses.

For example, you might want to set aside money for a $12,000 holiday in 12 months.

Instead of waiting until the expense arrives, you can build the required savings into your ongoing cashflow.

The same approach can be used for renovations, a new car or other planned expenditure.

7. Expenses Paid by Your Employer or Business

If your employer or business pays an expense directly, it generally should not also be included as a personal household cashflow expense.

For example, if your employer pays your mobile phone bill, that expense does not need to be entered as a household expense.

BudgetRite is designed to show the money that actually flows through your household finances.

If the business or employer reimburses you after you have paid the expense personally, again it generally should not also be included as a personal household cashflow expense.

The important principle is to avoid double-counting expenses.

8. Investment Properties

Ideally, keep investment property income and expenses separate from your personal household cashflow.

Consider maintaining a separate bank account for each investment property.

This makes it easier to see the actual cashflow generated by each property and identify whether you need to contribute additional money from your household finances.

Investment Property Income

Rental income should ideally be paid into the account established for that investment property.

Investment Property Expenses

Mortgage repayments and other property expenses should ideally be paid from the same account.

This creates a much clearer picture of each property's own cashflow.

If Your Property Is Negatively Geared

If the property operates at a cashflow deficit, your household will need to provide the difference.

For example, if an investment property requires an additional $500 per month from you, your household cashflow needs to account for that $500.

If BudgetRite is set up correctly, this contribution should be visible within your household cashflow.

Logistically, you might transfer the required amount from your household account to the investment property's separate account each month.

The important thing is that the money required to support the property is visible rather than overlooked.

9. How Often to Review Your Budget

Your first BudgetRite budget is unlikely to be perfect.

In particular, your Living expenses may need to be adjusted once you have used the system for a few months.

Allow approximately one to three months to refine your figures and establish a realistic ongoing budget.

After that, we recommend reviewing your BudgetRite information approximately every 3–6 months, or whenever there is a significant change in your circumstances.

This could include:

• A change in income
• A new loan
• An interest-rate change
• Paying off a loan
• Having a baby or taking parental leave
• Changing jobs
• Reducing working hours
• Buying or selling a property
• A significant change in household expenses.

It is also worth reviewing your figures at least annually to account for changes in the cost of living and increases in household expenses.

Keeping BudgetRite up to date means it remains a useful snapshot of your current financial position.

Looking for Excess Spending

BudgetRite will not tell you how you should spend your money.

What it does is give you visibility over where your money is going.

For many households, the largest expenses—such as the mortgage, rent, food, childcare and school fees—are relatively difficult to change in the short term.

Other expenses may be more discretionary.

Go to the Budget tab and look down the Total-Annual column.

This can quickly highlight where your larger annual outgoings are.

Your Principal Home Loan, Rent, Food/Groceries, Day Care and School Fees may naturally be among your largest expenses.

But then ask:

What are the next largest outgoings?

If BudgetRite shows significant annual spending on categories such as:

• Cash withdrawals *
• Take-away food and coffee
• Alcohol
• Cigarettes
• Gambling
• Other discretionary spending

you can see the financial impact of those expenses over a full year.

This isn't about BudgetRite telling you what you should or shouldn't spend your money on.

The decision is yours.

The benefit is that you can see the numbers clearly and decide whether a particular expense is worth the impact it has on your overall cashflow.

* Cash Withdrawals are generally being spent in one of the other categories.

What Happens If You Find a Surplus?

Once you have identified a genuine surplus, BudgetRite can help you consider what you could do with it.

Depending on your circumstances, a surplus could potentially be directed towards:

• Paying down debt
• Building savings
• Investing
• Additional superannuation contributions
• Funding renovations
• Holidays
• Other financial goals.

The important first step is simply knowing that the surplus exists.

Modelling Different Scenarios

Once you have entered your information, BudgetRite provides a snapshot of your current household cashflow.

This becomes your base budget.

You can then copy the budget and create a new scenario to see what could happen if your circumstances change.

Changing Interest Rates

For example, if your lender tells you that your home loan repayment is changing, copy your current budget and create a new scenario.

Update the loan repayment amount in the Budget tab.

Then go to the Summary to see how the change affects your projected household cashflow.

You can see whether the change leaves you with a surplus or deficit.

Reducing Working Hours

You can use the same process to model a change in employment income.

For example, if your partner currently works five days a week but is considering reducing to three days, you could estimate their new income based on the change.

As a simple starting point, if their current income is directly proportional to their working days:

Current income ÷ 5 × 3 = estimated three-day income

Enter the estimated income into the new scenario in the Budget tab.

Then go to the Summary to see how the change could affect your household cashflow.

You can use the same approach to model other changes, such as:

• Parental leave
• A new baby
• A pay rise
• Redundancy
• A new mortgage
• Paying off a loan
• Buying a car
• A major renovation
• Increased school fees
• A planned holiday.

Think of BudgetRite as a What-If Tool

The value of BudgetRite is not just knowing what happened last month.

It is being able to ask:

"What would happen to our cashflow if we changed this?"

You can create different scenarios without changing your underlying budget.