How to Budget 101: A Beginner's Guide To Saving

How do you start a budget? Know where to start and create a budgeting plan you can stick to with our Budgeting 101 Guide.

14 min Read

Updated on

Feb 20, 2021

Budgeting doesn’t always have to mean saving every dollar you make. In fact, the true markings of a good budget are ones that allow you to enjoy yourself while saving cash to help you achieve your long term goals.
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A budget is essentially a roadmap for where you want your money to go. Start budgeting your money today and get in control of your finances. Avoid common budgeting mistakes, don’t get caught up on bean-counting and set up the perfect budget you can live with. Check out some simple budgeting tips for beginners below and learn how to budget money and save with ease!

What Is a Budget?

the Benefits of Budgeting

How to get into the Budgeting Mindset

50 30 20 Budget

Zero-based Budget

Using Tools & Tech

Common Budgeting Mistakes

What is a budget?

Put simply, a budget is a detailed list of your income, what money is coming in and what is going out. Rather than just looking at your bills and necessities, a budget looks at all of your spending - yes everything! That includes social expenses and entertainment, groceries, medical expenses, household necessities and even birthday presents or Christmas gifts. Putting together a personal budget gives you an idea of where your money is going and where you can save.

What are the Benefits of Budgeting?

Why should you budget? Creating a budget will give you a holistic view of your expenses, and allow you to visualise your incomings and outgoings with ease. There is a wide range of benefits to budgeting, including:

Complete control over your money

Seeing where you have been spending in black and white will allow you to take the power back with your spending, and help you to feel in control of your finances.

Uncover spending patterns

Spending too much on work lunches? Bought a few too many rounds of drinks at the weekend? Understand your spending patterns, and find saving opportunities you can live with.

Transparent tracking

Tracking your spend against your financial goals will give you more of a push not to buy that morning coffee or unnecessary item.

Saving for a rainy day

Clearly visualising your incomings and outgoings will give you an idea of how much you can save, and give you more peace of mind.

Create a safety net

Squirrelling away a few dollars here and there will give you a safety net in case of emergencies, and help you to be prepared for whatever life throws at you.

Worry less

Knowing you have a little extra money tucked away will help relieve some of those money worries, giving you more time to worry about the things that really matter to you.

How to get into the Budgeting Mindset

Determine why you need a budget

Need help with budgeting money? Discover what your main savings goal is, and how you can best achieve it. Sit down and write down your financial goals. Maybe you’re saving for a holiday, or just want to have a little extra each month so you aren’t living from pay cheque to pay cheque.

Below are just some of the reasons people decide to track their spending with a monthly budget:

To reduce overspending in problem areas.
To stay on track with long-term goals.
To reduce conflict between partners.
To ensure that your spending is reflective of your values.
To break the cycle of living pay cheque to pay cheque.
To live within your means.
To get out of debt.

Get a full picture of your spending habits

First, add up all your income so you can see how much you have coming in each month. Make sure you include all of your income, including your salary, money from any side hustles or second jobs, child support or alimony arrangements, business income and any income you receive from investments. If your income varies from month to month, or you are working freelance, one way to get the most out of your budget is to essentially pay yourself a salary. This way you can decide on a set amount you are comfortable with, and save anything leftover on a good month to cushion you through a bad month. This will also help you to curb any unnecessary spending, and help you to feel more financially stable.

Once you have noted your income, you can start to create a list of outgoings. Once you have this all noted down, you can start to see what is realistic for your budget. Start by tracking your spending for 30 days, or looking at your spending for the previous month. There are a number of ways to track your spending:

Spreadsheet budgeting.
Whether you’re a spreadsheet wizard or an Excel beginner, entering your purchases into a spreadsheet will give you full visibility on your spending. This can be time-consuming, and you may forget now and then, but will ultimately give you the clearest view of your finances.
Note it down.
Keep a notebook to hand and note it down whenever you make a purchase.
Budgeting Apps.
There is a range of budgeting apps available to make it easier to track your spending by linking your bank accounts and credit cards. Be sure to link all of your accounts to ensure you get an accurate view of your spending.
Bank Statements.
Review your bank statements and credit card statement to track your spending across more than one account. The only downfall with keeping a budget this way is the statements may not have your transactions detailed as you would like, and you may not remember what certain transactions were for, so it may be better to just use your bank statements as a starting point when you are putting together your budget.

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Set specific budgeting goals

Personalise your finance goals. Think long-term and set actionable, realistic goals. The key to budgeting is to be specific with your goals and have a solid deadline to work towards. Instead of saying, “I’m saving for a trip overseas,” you should say, “I’m saving $10,000 by June for a trip overseas.” Cementing your goals will give you the motivation you need to make your savings dreams a reality, and give you something more concrete to work towards.

Some popular long-term finance goals are below:

Saving for retirement
Education costs
Paying off debts
Travel and holidays
Buying a house
Buying a new vehicle

Choose the budgeting format that works best for you

With your income set out in front of you, it’s time to lay the foundations for your budgeting and forecasting set up. It’s important to choose a budget management system that works for you, taking into account what you value.

Below are two of the most popular simple budget systems you can implement today!

The 50 30 20 Budget

The 50 30 20 budget, made popular by Senator Elizabeth Warren in the United States, is great for allowing flexibility in your budget but can lead to overspending if used incorrectly.

To use this budget take your monthly wages after tax and set aside 50% of your monthly income towards needs, such as food, rent and any repayments you need to make. Then take 30% and put that towards your wants, things like entertainment, weekend trips or online shopping. The remaining 20% can then be put towards your savings goals.

Zero-based Budget

A zero-based budget involves making your income minus your outflow hit $0. Using this method, all of your dollars are assigned a job that represents a spending category, with some going to savings and others going to pre-defined pockets. This budget is restrictive, so it’s not a one-size-fits-all solution, but it will definitely help to avoid overspending and meet your goals.

Using Tools & Tech to keep you on Track

There are a number of organisational tools and tech you can use to keep on top of your budget. Here are some ways to keep yourself accountable:

Keep up to date

Use a calendar to map out any irregular expenses you may need to plan for, such as annual holidays, Christmas and birthdays, and other important payment months, such as tax time or annual car registrations and inspections.

Automate your savings transfers

Have a specific transfer set up at the beginning of the month that transfers your savings for the month automatically. Then leave it where it is!

Set up direct debits

Ensure your bills are automated so that money budgeted for bills and other expenses goes straight to those things . If it’s gone before you can get your hands on it, you’re less likely to spend it.

App tracking

Track your spending with a budgeting app to make sure you’re sticking to your goals. An app makes it easy to keep your eye on your linked accounts and see where your money is going each month.

Be Aware of these Common Budgeting Mistakes

Save, save, save

Set up a savings account and keep adding to it each month. Little by little, your savings will increase.

Think long-term

Give yourself long-term goals and save more. Try not to push your expenses into the following month, and be sure to keep an eye on any birthdays or holidays coming up in your budget calendar and budget accordingly.

Take the little things into account

Don’t forget about those small charges that can mount up, such as that $2.50 fee when you withdraw money, the $12 fee on your bank account or that morning coffee pick-me-up. Make room for these in your budget to avoid any discrepancies.

Be realistic

Don’t plan an unrealistic budget for yourself that you’ll never be able to achieve. Set yourself goals you can reach, and you will save more in the long run. See how it goes after the first 30 days, and if you can’t stick to it, change it!

Make monthly adjustments

Be strict with yourself, but make sure you account for the change. Small changes such as increased monthly repayments, changes to your interest rates on your mortgage can affect your budget. Adjust to these changes and you will save more later down the track.

Try not to overspend!

Stick to your budget! If you’re spending more than you’re earning, you will find yourself in debt - fast.

For people juggling more than one debt, being able to create a budget or set saving goals can be a challenge. Depending on your situation, a debt consolidation loan may help by combining multiple repayments into one while lowering your overall interest rate.

Frequently Asked Questions

Things to Consider Before Getting a Personal Loan

Eligibility criteria for personal loans

If you’re thinking of applying for a personal loan from SocietyOne, there are a few key criteria that you’ll need  to meet to be eligible:

You need to be at least 18 years of age
Be an Australian citizen or a permanent resident of Australia
You must earn more than $30,000 per annum, with Centrelink considered to be a supplementary form of income
It’s important that you have a good credit score

What will I need to get a personal loan?

You may need to supply us with the following  information and documents as part of your personal  loan application:

Your personal details – name, address, date of birth
A driver’s licence or passport
Proof of your address - for example, a utility bill
Proof of your income in the form of payslips or bank statements
Details about your day-to-day expenses, and any other debts

What is the process of applying for a personal loan?

Applying for a SocietyOne loan is simple.

‍Get your rate: In as little as 2 minutes we'll give you an interest rate and comparison rate based on your credit profile.‍
Apply online: Most people finish their application within 5 minutes (and it's easier to do if you're enjoying your morning coffee).‍
Get paid: Once approved, we'll have the loan funds in your account in as little as 1 business day.‍

Get your rate now and get started.

How much can I borrow, and for how long?

The amount you can borrow depends on the loan options you choose and your serviceability (this is a calculation of how much you can afford to repay)

With an unsecured personal loan, you can borrow from $5,000 to $50,000. However, if you choose our secured option, you can borrow up to $70,000.

With either option, you should borrow the amount that best suits your situation, making sure you will be comfortable paying off each instalment.

I've forgotten my password

Please contact customer service at customer.service@societyone.com.au.

What are the interest rates?

Fixed interest rate

Our personal loans have a fixed interest rate, meaning your interest rate doesn't change during the life of your loan and your regular repayments are always the same.

Fixed rate personal loans can help make it easier for you to budget. With no early repayment fees, our fixed rate loans give you more freedom and allow you to pay off your debt sooner.

Our fixed rates for unsecured personal loans start from 6.45% p.a*

Our fixed rates for secured personal loans start from 5.45% p.a* ‍

Comparison rate

If you’re looking to compare personal loans, the comparison rate is the most transparent way to compare the true costs. A comparison rate takes into account the interest rate as well as all of the fees and charges that are payable (such as establishment fees), making it easier to understand the complete cost of the personal loan with a more transparent comparison of the products.

If you’re looking to compare personal loans, the comparison rate is the most transparent way to compare the true costs. A comparison rate takes into account the interest rate as well as all the fees and charges that are payable (such as establishment fees), making it easier to understand the total cost of the personal loan with a more transparent comparison of the products.

Our comparison rates for unsecured personal loans start from 6.45% p.a*

Our comparison rates for secured personal loans start from 5.45% p.a*

Are there any fees?

We charge a one-off establishment fee that is included in your total loan amount. There are also no monthly fees or early repayment fees giving you the security of a fixed rate loan, with the flexibility to pay it off early. Visit our Rates & Fees page for further details.

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Establishment fee‍

No up-front payments, just a one-off fee included in your total loan amount and paid over the life of the loan. Establishment fees start from: 0% with a maximum establishment fee of $595.

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Late Repayment Fee

If your loan repayment is unable to be processed and the payment remains outstanding, a late fee will be payable at 5, 14, 21 & 30 days after the payment date. Late Repayment fee: $35 per late payment

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Direct Debit Dishonour Fee

‍It’s important to ensure there are enough funds in your account to cover each of your repayments to avoid dishonour fees. This fee is payable if we are unable to process a direct debit from your account.

Dishonour fee: $15 per dishonour

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Early repayment fee

‍Some lenders charge you for paying your loan out early. We don't!

Early repayment fee: $0

Are there any certain amounts or terms I should be aware of?

Loan amount limits‍

The minimum and maximum amounts you are able to borrow:

$5,000 to $50,000 for unsecured personal loans
$5,000 to $70,000 for secured personal loans

Loan terms‍

Your repayments are split over your loan term. A shorter loan term means less interest is paid over the life of the loan, while loans with longer terms will have lower regular repayments.

You can choose the loan term that suits you:

2 years, 3 years or 5 years for unsecured personal loans
2 years, 3 years, 5 years or 7 years for secured personal loans.

Is a credit check mandatory in order to apply for a personal loan?

Yes, we use this and assess your financial situation to calculate your interest rate & reward borrowers who have maintained good credit scores. Receiving a rate quote from us will not impact your credit score. We use what is called a 'soft call' to get your credit score from the credit bureau which allows us to calculate a personalised rate for you. However, once you have submitted your loan application, we will conduct a credit check as part of our assessment process. This check is known as a 'hard call' and will be reflected in your credit score.

Can I apply for a personal loan if I am currently unemployed?

To be eligible for any SocietyOne personal loan, you need to be employed and earning more than $30,000 per annum (Centrelink can be used to support this income).

What’s the difference between a secured personal loan & an unsecured personal loan?

Most personal loans come with two options, as a secured or unsecured loan. But which option is best for you?

With a secured loan, you will need to provide an asset as security, such as a car. Secured loans can benefit from lower rates, longer loan terms and the ability to borrow larger amounts. They’re great if you own an asset outright, or are looking to buy a car. However, if you don't repay the loan on time, the lender has the right to seize and sell your asset.

With an unsecured loan, You don't have to put up an asset for security. The benefit of an unsecured loan is faster, simpler application and assessment, so you could get the money faster.

What happens if I can’t meet my loan repayments?

If you need short-term or medium-term assistance with your repayments please get in touch with us immediately. Our customer service team can discuss options with you that can include flexibility with instalments due, time extensions & other hardship solutions depending on your circumstances.

How is the interest rate of my loan calculated?

Our interest rates are personalised for each customer and are determined based upon factors such as your credit score - the higher your score, the lower your interest rate.

Are there any additional fees or charges on top of my loan repayments?

We charge a one-off establishment fee that is included in your total loan amount. There are no monthly fees or early repayment fees. You can learn more about how our rates and fees work here.

How much can I borrow?

The amount you can borrow depends on the loan options you choose and your serviceability (this is a calculation of how much you can afford to repay)

With an unsecured personal loan, you can borrow from $5,000 to $50,000. However, if you choose our secured option, you can borrow up to $70,000.

With either option, you should borrow the amount that best suits your situation, making sure you will be comfortable paying off each instalment.

What loan terms can I choose from and can I pay my loan off early?

We offer 2, 3 or 5 year terms with our unsecured loans, or up to 7 years with our secured loan option.

You also have the freedom to pay out your loan early in full or make additional lump sum payments during the life of your loan with no extra fees or penalties.

What repayment options are available?

Personal loan repayments can be made in either fortnightly or monthly instalments by direct debit.

Your regular repayments are calculated based on your loan amount, interest rate, loan term (2, 3 or 5 years with an unsecured loan or up to 7 years with a secured loan), and whether you have chosen fortnightly or monthly repayments.

How long will it take for me to receive my funds?

Once you're approved the funds will be transferred to your bank account, usually within 24 hours.

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Ready to apply for a personal loan?

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How to Budget 101: A Beginner's Guide To Saving

Table of contents

What is a budget?

What are the Benefits of Budgeting?

Complete control over your money

Uncover spending patterns

Transparent tracking

Saving for a rainy day

Create a safety net

Worry less

How to get into the Budgeting Mindset

Determine why you need a budget

Get a full picture of your spending habits

Set specific budgeting goals

Choose the budgeting format that works best for you

Use our loan calculator to get your free personalised rate

The 50 30 20 Budget

Zero-based Budget

Using Tools & Tech to keep you on Track

Keep up to date

Automate your savings transfers

Set up direct debits

App tracking

Be Aware of these Common Budgeting Mistakes

Save, save, save

Think long-term

Take the little things into account

Be realistic

Make monthly adjustments

Try not to overspend!

Frequently Asked Questions

Eligibility criteria for personal loans

What will I need to get a personal loan?

What is the process of applying for a personal loan?

How much can I borrow, and for how long?

I've forgotten my password

What are the interest rates?

Fixed interest rate

Comparison rate

Are there any fees?

Establishment fee‍

Late Repayment Fee

Direct Debit Dishonour Fee

Early repayment fee

Are there any certain amounts or terms I should be aware of?

Loan amount limits‍

Loan terms‍

Is a credit check mandatory in order to apply for a personal loan?

Can I apply for a personal loan if I am currently unemployed?

What’s the difference between a secured personal loan & an unsecured personal loan?

What happens if I can’t meet my loan repayments?

How is the interest rate of my loan calculated?

Are there any additional fees or charges on top of my loan repayments?

How much can I borrow?

What loan terms can I choose from and can I pay my loan off early?

What repayment options are available?

How long will it take for me to receive my funds?

Have some more questions?

Ready to apply for a personal loan?