What is budgeting?

A budget is a plan that shows you how much money you’re earning, spending and saving.

By understanding where your money is going each week or month, you can more easily see ways to spend less and save more. Creating a realistic budget can help you hit your savings goals faster.

Here's how to plan a budget you can stick to, so you can start making progress towards those bigger money goals like an overseas trip or a house deposit.

The benefits of budgeting

Creating a savings plan has many benefits: 

  • You can better manage your finances and plan ahead to cover essential expenses like home loan repayments, rent, bills and groceries.

  • You’ll have a better understanding of where your money is going, so you can cut back on things that aren’t important or that you might not use, like streaming services or gym memberships.

  • By finding ways to spend less and save more, you can meet your money goals faster. 

How to budget your income

A simple way to budget your money is with the 50:30:20 rule:

  1. Budget 50% of your income towards living expenses like rent, bills and groceries.
  2. Budget 30% of your income towards lifestyle costs like eating out, new clothes or concert tickets.
  3. Save the remaining 20% of your income.

This breakdown won’t work for everyone – you can change the percentages to make it work for you. Learn how to use the bucketing method of budgeting to save money.

If you’re spending more than you earn, focus on paying down any debts and cutting costs, or look for ways to increase your income. Reach out to us if you need financial assistance.  

How to work out your income

For most of us, this is a matter of checking our payslip and seeing what we get after tax and super.

It’s trickier if you’re a contractor or self-employed, or if your income varies from month to month. Use your last tax return and work out your weekly net income (after business expenses, GST and PAYG).

Do you have any other sources of income - interest from investments, government contributions or child support payments? Work out what they average week to week, then add this in too. 

Set a savings goal

What are you saving for? Maybe it’s a short-term goal, like a holiday. Or perhaps you’re saving for something significant, like your first home. Regardless of how big or small, having a goal in mind will make it easier to stick to your budget. Tracking your progress towards achieving your goal will also motivate you to keep saving.

An easy way to set and track your savings goal is by using My Goals in the NAB app. With My Goals you can add your savings goal to your NAB savings account and track your progress towards meeting it.

You can get started today by exploring our savings accounts.

Track your expenses

It can be easy to underestimate how much you spend on a day-to-day basis. But to create a realistic budget, it’s important to find out how much you’re spending, and on what.

Realistically, the quickest way to improve your personal bottom line is to cut costs. Unfortunately, the areas where you can make the biggest savings are often the things that are most fun – like going to the movies, or big Friday nights out.

Be realistic. Don’t introduce cuts across the board or take $20 off food without knowing what you can (and will) give up or change.

The easiest way to assess your current spending is to use the Spending tool in the NAB app. Spending is an expense tracker that helps you track your expenses and organise your money. Tracking your expenses is the first step in understanding where your money is going so you can save more. You can get started today by opening a NAB Classic Banking account.

It’s helpful to group things into categories:

Housing costs

Home loan repayments or rent, home repairs, insurance, rates and utilities like gas, electricity and water. Make sure you shop around to get the best price for your utilities.

Food and drink

This includes groceries, takeaway, eating out, coffee and snacks. Think about ways you could save money by buying groceries while they’re on special, or by taking a packed lunch to work.

Clothes, shoes and accessories

Renting clothing for events or shopping second hand is a smart way to save money here.

Transport costs

For example, petrol, parking and insurance. Depending on where you live and work, public transport may be a cheaper option than a car.

Mobile and internet

Look at the plans different providers offer and make sure you’re getting the best deal.


Premiums for health, lifecar, travel and home insurance may be paid yearly or monthly. Compare multiple quotes to ensure you get the best coverage for the best price. Paying your insurance premiums yearly instead of monthly can work out cheaper.

Health and wellbeing

This includes costs like doctor and dentist appointments, new glasses, or medications. You can also include costs like gym memberships and sports club fees here.

Leisure and entertainment

Consider streaming subscriptions, weekends away, movies, Christmas and birthday gifts.


Make sure to include repayments for personal loans, credit cards, store cards and other loans, and the interest that comes with them. Learn more about how to pay off your debt.

Unplanned expenses

This could include a new fridge or major car repairs. Replacing bigger items can make a significant dent in your savings. Learn how to build an emergency fund to cover these bigger, unexpected costs.

Use our budget planning calculator to help you work out your budget, and read more money saving tips

Learn more about budgeting

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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.

Target Market Determinations for these products are available at nab.com.au/TMD.