How to create a budget

A budget is really handy to have, whether you constantly find yourself low on funds or just never seem to be able to save up enough cash to pay for that shiny new kitchen appliance you’ve been coveting.
Keeping track of what you’re spending is the best way to stay on top of all your bills and still be able to enjoy the finer things in life. But if you’re not sure how to even get started when building a budget, don’t worry. We’re the budgeting experts, and we’ve laid it all out for you.
First of all, what is a budget?
You might be wondering what a budget even is? A budget is simply a forecast of your earnings versus your expenses over a set period of time, say a week, a month or even a year. Having a budget allows you to review how much of your pay check you might be spending on rent, bills, groceries and entertainment, and then make adjustments so that you’re not spending outside your means and you can hit your savings goals.
Where to start: the building blocks of budgeting
Before you dive into calculations and start analysing your latest bank account statements, the first step is to decide how you want to layout your budget. Getting this step right is crucial to the success of your budget Some great options are:
- A neat spreadsheet. If you love laying things out in an orderly fashion then you may like to build a spreadsheet to keep track of your income and expenses.
- Good old fashioned pen and paper. It could be as simple as that, if maths and formulas aren’t for you then try drawing up a budget in your notebook. Top tip: dedicate a notebook to your budget and don’t mix it in with other notes or you’ll lose track.
- Download a budget app. There are a bunch of great options to choose from, but if you need help picking one here’s our review of seven budgeting apps everyone should try.
- Check out Mozo’s budget calculator. It’s simple to use and will help you break down all your different expenses, so you don’t forget anything.
Next, think about what time period you want your budget to cover, and whether you’ll work to a weekly, fortnightly, monthly or annual budget. Some important factors to take into consideration are:
- How often you get paid. If you receive your pay check weekly then you may want to set up a weekly budget plan so that you can plan to stash money away every time you get paid.
- How often you pay your bills or loan repayments. If you have multiple bills due monthly then you may want to review your outgoings once a month, so that you know exactly how much you have left over after you’ve paid everything, for either fun stuff or savings.
- Whether you’re saving for something big. If you’re saving for something big, like a car or even your first home, then you may have a goal to save a certain amount over one year, in which case it might be handy to draw up a yearly budget, which you can then break down into a weekly or monthly spending limit.
Remember, if you want to budget monthly but you receive your pay weekly then an accurate way to figure out your monthly pay would be to multiply by 52 and then divide by 12. Or if you want to budget weekly and you receive your pay monthly then you will have to multiply by 12 and then divide by 52.
Create your budget in three easy steps
This brings us to actually creating your budget, which may seem intimidating, but is actually probably easier than you think. Here’s how to do it.
1. Start with your net income
It’s important to understand the difference between gross and net income. Gross income is what your employer pays you before tax or other deductions are taken off and net income is the amount you receive after all deductions like tax and superannuation are taken off.
Quite simply, your net income is the amount you receive in your bank account from your employer, so you need to budget based on this number. It may be written as “net pay” on your pay check, or you can simply check your bank statement to find it.
If your pay varies with each pay cycle, because you work part-time or you pick up a few extra shifts now and again, then you may want to work out an average net income for your budget.
For example, if your net income for one fortnight is $1,300 but $1,600 the next fortnight then you would add these two figures together and divide by two to figure out your average fortnightly pay. In this instance the average would be $1,450 and you could build your budget around this figure.

2. List and categorise your expenses
The next step is to figure out all your expenses and list them out, putting them into different categories to make them easier to prioritise. Broadly, the categories to work in are:
- Expenses such as rent, mortgage and car payments would be fixed payments. These are payments that you make regularly, they usually stay the same and can’t be compromised on.
- Necessary expenses are payments that can change from month to month, but are usually a priority to pay. They’re often things that are necessary for your day to day life, including payments for your phone or energy bills.
- Discretionary expenses are optional and could include things like entertainment costs, like going to see your favourite band play, or money spent on new clothing, shoes and accessories.
Consider thinking about your expenses as a pyramid where the most important expenses make up the largest foundation, and the least important, discretionary expenses, are the cherry on top.

3. Calculate your incomings vs outgoings
Once you’ve categorised all your expenses, subtract your total costs from your net income to see if you’re spending within your means. For example, if your monthly net income is $4,000 and you’re spending $3,415.99 each month, then you’re in the clear, with $584.01 left over for savings and other fun stuff.



How to budget better
Once you’ve worked out your budget and reviewed how much you spend on each category you might want to start thinking about how you could be budgeting your money better.
Review how much you spend on unnecessary items or fun stuff. If you’re shocked by how much you spend on eating out during the week or on clothing, shoes and accessories, then consider cutting down. Work out how much of your income is left after paying bills and adding to your savings stash, and then decide how much you can splurge on fun stuff – not the other way around.
Make changes to your necessary costs. Just because they're necessary doesn't mean you can't get a better deal. If your phone bill is always high then think about changing plans, or if your electricity bill is a pain in the back pocket, think about switching energy providers or haggling for a better deal with your current one.
Make your savings goal a necessary expense. Think of it as a payment that you owe to yourself, and prioritise building up a savings buffer over shopping. You could even set up an automatic transfer to your savings account for the day or the day after you get paid.
Check up on your budget regularly. Once you’ve created your budget, reviewed all your expenses and thought about what you could be saving money on, make sure you keep it up. This could be as simple as filling out your spreadsheet every week, keeping your notebook up to date or setting reminders on your phone to stick with your budgeting app.
Ready to put together a budget and start keeping track of your expenses?
Why not check out Mozo’s budget calculator to help get you on the right track. And don’t forget to pair your new budget with a high interest savings account for your new stash.
Compare high interest savings accounts - last updated 2 July 2022
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Save Account
Maximum rate
standard interest rate
Govt Deposit Guarantee
1.85% p.a. (for $0 to $250,000)0.10% p.a.(for $0 and over)Yes up to $250,000Deposit at least $200 to either Spend or Save account from an external source each month.
Earn up to 1.85% p.a in interest. No monthly fee to pay. Split your money in up to 10 Save accounts. Track your progress on each of your save accounts. Instant access to cash via PayID and Osko. Deposits guaranteed up to $250k per customer.
CompareCompareSave Account
Earn up to 1.85% p.a in interest. No monthly fee to pay. Split your money in up to 10 Save accounts. Track your progress on each of your save accounts. Instant access to cash via PayID and Osko. Deposits guaranteed up to $250k per customer.
- Maximum rate
- 1.85% p.a. (for $0 to $250,000)
- standard interest rate
- 0.10% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Deposit at least $200 to either Spend or Save account from an external source each month.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Bank and saving account only accessible through iOS or Android app.
Read our Mozo Review to learn more about the Save Account
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Future Saver Account - 14 to 35 years
Maximum rate
standard interest rate
Govt Deposit Guarantee
3.00% p.a. (for $0 to $50,001)0.05% p.a.(for $0 and over)Yes up to $250,000Transfer a minimum of $1,000 into your linked Everyday Account and make 5 eligible transactions. Bonus interest criteria waived for account holders 14-17 years of age.
Enjoy bonus interest each month when you meet the criteria. No monthly fees. Open an account in minutes. Open up to 9 accounts. Transaction round-up for faster saving. Personalised insights and goal tracking. For customers aged 14-35 years.
CompareCompareFuture Saver Account - 14 to 35 years
Enjoy bonus interest each month when you meet the criteria. No monthly fees. Open an account in minutes. Open up to 9 accounts. Transaction round-up for faster saving. Personalised insights and goal tracking. For customers aged 14-35 years.
- Maximum rate
- 3.00% p.a. (for $0 to $50,001)
- standard interest rate
- 0.05% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Everyday Account and 5 eligible transactions are made by the linked account. Bonus interest criteria waived for account holders 14-17 years of age.
- Access
- BPay, Branch access, Internet banking
- Minimum balance
- $1.00
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Read our Mozo Review to learn more about the Future Saver Account - 14 to 35 years
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Youth eSaver
Maximum rate
standard interest rate
Govt Deposit Guarantee
No Current Offer3.25% p.a.(for $0 to $5,001)Yes up to $250,0003.25% p.a. interest rate on balances up to $5,000; 1.00% p.a. interest rate on balance over $5,000. $0 monthly account fees to pay. Add and withdraw your savings without affecting your interest rate. Comes with an Everyday Youth Account. Available to applicants aged 10 to 17 only.
CompareCompareYouth eSaver
3.25% p.a. interest rate on balances up to $5,000; 1.00% p.a. interest rate on balance over $5,000. $0 monthly account fees to pay. Add and withdraw your savings without affecting your interest rate. Comes with an Everyday Youth Account. Available to applicants aged 10 to 17 only.
- Maximum rate
- No Current Offer
- standard interest rate
- 3.25% p.a.(for $0 to $5,001)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- n/a
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $1.00
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- Child must be aged 10-17 and sole account owner. Max 1 Youth eSaver account per eligible child. Must link to a transaction account.
Read our Mozo Review to learn more about the Youth eSaver
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Mozo experts choice awards won:
- Best New Savings Account - 2022
Boost Saver with Go Account
Maximum rate
standard interest rate
Govt Deposit Guarantee
2.00% p.a. (for $0 to $250,000)0.05% p.a.(for $0 and over)Yes up to $250,000Bonus rate of 2.00%. Deposit $2,000 each month, make 5 eligible payments from your Go Account and enable the Lock Saver feature. If you are between 18 and 25 deposit $1,000. 32 days notice for withdrawal and T&C's apply.
Enjoy a high interest savings account bundled with an everyday spending account. No monthly fees. And new customers can get a welcome bonus of 5,000 bonus Virgin Money Points (ends 31/8/22. Offer criteria & T&Cs apply).
CompareCompareBoost Saver with Go Account
Enjoy a high interest savings account bundled with an everyday spending account. No monthly fees. And new customers can get a welcome bonus of 5,000 bonus Virgin Money Points (ends 31/8/22. Offer criteria & T&Cs apply).
- Maximum rate
- 2.00% p.a. (for $0 to $250,000)
- standard interest rate
- 0.05% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus interest 2.00% is made up of the Base rate of 0.05%, Bonus rate of 1.45% and Notice Interest Rate of 0.50%. It only applies when you deposit $2,000 into your Go Account and make 5 debit card purchases, direct debit or BPAY payments in the previous month and enable the Lock Saver feature. If you are between 18 and 25 you need to also deposit $1,000. 32 days notice for withdrawal and T&Cs apply.
- Access
- BPay, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Bank and savings account only accessible through iOS or Android app.
Read our Mozo Review to learn more about the Boost Saver with Go Account
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Featured Product
Mozo experts choice awards won:
- Regular Saver - 2022
Bonus Saver Account
Maximum rate
standard interest rate
Govt Deposit Guarantee
1.60% p.a. (for $0 to $250,000)0.05% p.a.(for $0 and over)Yes up to $250,000Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.
Winner of a Mozo Experts Choice Award 2022 in the Regular Saver category. No monthly account fees. Available only on balances up to $250,000.
CompareCompareBonus Saver Account
Winner of a Mozo Experts Choice Award 2022 in the Regular Saver category. No monthly account fees. Available only on balances up to $250,000.
- Maximum rate
- 1.60% p.a. (for $0 to $250,000)
- standard interest rate
- 0.05% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Bonus Saver Account
^See information about the Mozo Experts Choice Savings Account Awards
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