The Five-Minute Budget to Turn Your Finances Around

Are you grappling with the rising cost of living and trying to manage debt? What if you could get a handle on your money in just five minutes?

It's more achievable than you think. This quick budget approach is designed specifically to help Australian househols understand their cash flow, track expenses, identify savings and tackle debt; all without spending hours crunching numbers.

Before we jump into how to create a quick budget let's look at the main options you have to prepare a budget. These all work, so it comes down to personal choice.

Some love the old fashioned pen and paper.

Spreadsheet gurus swear by their excel budget spreadsheets.

Or you can go with one of the modern budgeting apps that come with it all built in.

It doesn't matter which you choose; the important thing is you are setting up a budget and reviewing your finances.

The first step is to get a rough idea of where your money's going. A quick guess is fine.

Think about all your regular expenses: rent or mortgage, groceries, transport, entertainment, bills, debt repayments, etc. Jot down an estimated amount for each.

Also make a note of your income sources: salary, side hustles, government benefits, investment income and any other income.

With these two covered you've got a great starting point.

Quick side note. One advantage of apps (like MoneyFormula) is that they come with a default set of Australian expense categories so it can make it much easier and quicker to fill in the blanks.

You don't have to waste time setting up everyting from scratch, which is great as we want to be done with this budgeting in five minutes.

You can also easily customise the list of categories at any time by hiding categories you don't use or adding specific ones relevant to your situation.

Once you've assigned amounts to all the expense categories and you've added your income, take a look at the big picture.

Don't worry if you've missed a few things at this stage. The goal is to get a general overview.

This quick budget helps you see if you're spending more than you earn or if you have some leftover cash.

Ideally, you want to create a small buffer or surplus so that each month you are planning on spending less than you earn.

If you're spending more than you earn and your budget is in the red, don't panic! This exercise helps you identify areas where you can potentially cut back.

Now that you have a clearer picture of your spending, look for areas where you can trim expenses.

Even small savings can add up and be put towards debt repayment or building an emergency fund. Think about things like reducing entertainment costs, cooking at home more often or finding cheaper alternatives for utilities.

Budgeting isn't a "set it and forget it" activity. Life changes, and so should your budget.

Review your budget regularly, weekly as you start out, then move to monthly or longer once you are more confident with your numbers. Also, remeber to update your budget if anything major happens (job promotion, new side hustle, new expenses, etc).

The trick is to make sure your budget continues to reflect your current situation to help keep you on track.

If you are new to budgeting and have just set up your first budget then you might not be too confident with your numbers. You can take an extra step and do a quick spending review.

This involves going back over the past few months of expenses from your accounts to find out exactly where your money went.

As you review your account transactions, adjust your budget for anything you missed; or adjust the amounts where you were just plain wrong (which happens!).

I have covered this more in the Spending Review article so check it out if you need more details.

Try the MoneyFormula Five Steps to Success today and discover just how easy it is to set up your first budget and take control of your finances!

MoneyFormula will help you complete your budget in minutes, review your recent spending and get an accurate picture of your finances. It even has a dedicated cash flow report that shows you month to month exactly how you are tracking.

Give MoneyFormula a go and see what you think!