The Art of Budgeting


Budget Planning

Usually, the connotation of the word budget implied is that it is a restrictive reminder for things that one cannot have. However, in reality, this is not the case. Budgeting is a process that teaches one to develop an economically responsible lifestyle. Precisely, a budget is a plan that entails, ‘how you will spend your money’. Additionally, the main aspect of budgeting is that you save some amount of money regularly so as to keep something for later use or for an emergency.

So, then the question that remains is that from where you should start budgeting? The most sensible of all approaches would be to start off with your bills. There are many people who earn hourly or work on commission and they find it hard to budget because of the unpredictability of the wage. However, the principles of budgeting have more to do with your spending lifestyle rather than your earning. No matter what you earn and how there are fixed expenses that everyone has to pay such as the following:

  • Food
  • Education
  • Healthcare
  • Rent or Mortgage Payment
  • Transportation

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For this reason, monitor and calculate how much expense you had to pay in the worst month and then plan accordingly for the following month. One way to go about it is to reduce your spending. The reason is that your income should be more than what you spend. This way you’ll be able to save yourself from debts and loans. In addition, other than fixed expenses you also need to plan for varied expenses- birthdays/holidays. If your expenditure is large, you can easily reduce or eliminate the variables from your ‘spending list’.  Additionally, you can also avoid and disregard impulse buying and also planned but redundant expenses.

Consequently, there might be times when you would want to spend on things that are irrelevant but is something you desire if this is a case try increasing your income so that you can spend on things you have a desire for. For example, looking for a higher paid job or getting a second job. But, the point to note is that even if you get stable financially, you should still be able to plan and manage the income and the best way is to simply live below your means.

Moreover, if you feel that you’ll spend all your salary once you have it, you can either get a split deposit that will save your requested money automatically and give you the rest. For example, if you make $1500 per pay period, you can ask for $1000 to be deposited directly into your checking account and the remaining to be deposited directly to savings.

Other than deposits you should also make an effort to live economically.  For example, overpaying your taxes per year will result in a decent refund that you can put into savings. However, this is not an ideal financial strategy but it can work for you only if you struggle to ‘save’. Lastly, you can also use budgeting and saving apps in order to save money. Connect with us to discuss what options are available.

In a nutshell, budgeting is a way to evaluate spending and built a budget. A budget is a tool that helps you get back on track in financial terms. Thus, the negative connotation that is attached to the word ‘budget’ is nothing more than a wrongly assumed presumption.

For anyone who is fearful of where they are financially there is something you can do today, right now, to feel better. Take action.

For anyone who is excited about where they are financially there is something you can do today, right now, to feel even better. Take action.


Speak to an Expert Financial Advisor



Theo Karoumbalis is director  & senior financial advisor at iadvice  Melbourne (a privately owned wealth management firm in Melbourne, Victoria). He helps successful individuals manage their wealth effectively. Theo’s graduated in Commercial Law, Commerce, Accounting and Financial Planning, is a best Advisor and have significant direct markets experience.

B.Law, (LLB), B.Comm, (Accounting & Finance)



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