Circle Alliance Bank

Get a call-back

To have one of our staff call you back please complete the form below.

  1. Your name...*
    Please enter your name
  2. Your phone number...*
    Please enter your phone number
  3. Optional message...
    Only number and letters are allowed
  4. *
    Invalid Input

Home Buyers Blueprint

Enter your details to receive your copy of our Home Buyers Blueprint.

  1. Your first name...*
    Please enter your first name
  2. Your email address...*
    Please enter your email address
  3. *
    Invalid Input


Budget your way to freedom

1. What is a budget?

A budget is simply a financial plan. It can range from a formal plan that includes all your income and expenses to a simple saving plan to help you achieve short or long term financial goals.

It may involve the discipline of rigid rules, tightening your belt and doing without the things you enjoy but this is not always the case.

We tend to think that if we budget, we will restrict ourselves on how we spend our money. In fact, budgeting can be quite the opposite. It’s about knowing how you spend your money, so that you can afford more of the things you like. It is also a way to free up funds to build into a savings plan for your future.

Budgeting is one of those things that we all know is a great idea but we always seem to put it off for another day.

3. Why budget?

The main purpose in having a budget is to help you from getting into financial trouble and to allow you to take control of your finances.

It’s a fact of life that many of us don’t know where our money goes and live slightly beyond our means, regardless of the size of our weekly wage. A well-designed but simple budget helps us keep expenses under control, manage unexpected bills and emergencies and lets us use our money for things that give us pleasure.

A budget puts you in control of your finances It allows you to sort out what are necessary expenses (essentials) and what are expenses you can afford to do without (non essentials). When you classify your expenses under these two headings it becomes much easier to see where you can save money.

Another advantage of having a budget is that can reduce your level of stress. You can set aside regular amounts to cover essential expenses and rest easier knowing that you can have enough funds to pay these expenses when the fall due.

Budgeting and saving go hand in hand. Careful budgeting makes saving possible and regular saving allows you to plan for the future. It’s satisfying to watch your savings increase and rewarding to use your savings for things that make your life more enjoyable.

Budgeting and saving are not hard to do, but take a little planning.

The most important step in creating a budget is to first make the commitment to yourself.

3. Starting your budget

A budget should be realistic and useful and help you to achieve the things you want out of life. It should also be flexible and adaptable to your changing circumstances.

There are five basic steps to starting and creating your own budget:

Start with a goal

Without a goal it will be difficult to stay focussed and motivated. You may want to take a holiday, buy a new car, accumulate savings for a rainy day or simply find excess fund to reduce your mortgage faster.

A good short term goal is to reduce your spending to 90% or less of your income. If you are able to do so, try and aim to save 10% of your gross (before tax) income. This can be split into 5% for short term goals and 5% for long term goals.

Make a list of your income

Add up all your income. Check recent payslips and any other sources of income (interest, dividends etc.)

Make a list of all your expenses

Go through your recent bank statements and make a list of all of your expenses. It helps if you can write down every expense no matter how big or small over a recent month. Once you have created your list take a few minutes to review it and highlight any expenses that you could (or should) have avoided. These will tend to be non essential expenses.

Prepare a Budget Worksheet

Download a budget worksheet from our website and insert all your income and expenses. If you can do this over a one year period you will capture non monthly expenses such as rates and utilities. It is also important that you place the expenses in the correct months as this helps to determine the months that have higher expenses.

TIP: Don’t stress with this process - if you need help please contact one of our friendly staff on 133 553 582.

Check the bottom line

Once you have completed step 2, check the bottom line of your worksheet to see if you have excess funds remaining. If you do, that’s great. If not, carefully review your expense items to see if anything can be reduced or avoided (mainly non essential expenses).

Stay on track – don’t be tempted

It’s easy to be tempted. Every day we are inundated with product marketing trying to get us to spend our money. Most non essential expenses are driven by emotion so if you are faced with a possible impulse purchase make a commitment to yourself by not making that purchase straight away. Think about it for 24 hours. Once the immediate emotion has passed you will find that you can easily get by without having made that purchase and you have saved important funds for you savings goal.

4. Finding Savings Opportunities

Do I really need it or is it just nice to have?

A lot of the purchases we make could be considered as short term emotional purchases which make us feel good only for a limited time. When faced with these types of purchasing decisions, ask yourself the following questions;

  • Will this purchase change my life?
  • If yes, for how long?
  • How does this purchase impact my savings plan?

In other words – do I really need it?

TIP: If you are tempted by that emotional purchase, walk away and think about it for 24 hours. Often you will realise you don’t really need that purchase.

How to grow your savings

The ability to save is based on a simple equation – spend less than you earn.

Whilst this may be difficult for those on lower incomes given that spending on basic essential items may be more than your income, there are still opportunities to review your spending habits.

  • Try to make it through one week without buying anything except absolute necessities.
  • Make a shopping list before you go to the supermarket and don’t give in to impulse purchases that you don’t need. Only purchase what is on your list. Try shopping online to avoid the temptation of impulse purchases.
  • Consider buying in bulk to save money. This can be a cost effective method for a group of friends to use their joint purchasing power.
  • Prepare meals at home and take your own lunch to school or work. Avoid expensive take away food and drinks.
  • Leave your credit card at home when you go out to stop impulse purchases.
  • Review your bank statement for any regular subscription services and cancel those you are not using.
  • Do you buy a cup of coffee every workday? This will cost you around $1,100 per year.
  • Do you have the top pay TV package? If you are not watching a lot of the channels you may be able to reduce this cost by moving to a different package.

Essentials vs non essential expenses

When setting up your budget be realistic, and categorize your spending into essentials and non essentials

Spending on essentials can be reduced if you shop around. Watch out for supermarket specials or contact another energy supplier to check if you are able to save on these expenses.

Essentials (Needs): Basic needs that allow you to live your daily life, for example:

  • Food
  • Housing (mortgage or rent payments)
  • Transport (car or public transport)
  • Health (i.e. doctor, dentist, chemist)
  • Education
  • Basic clothing
  • Utilities (gas, electricity, water, rates)
  • Insurance (home, contents, car, health)

Non essentials (Wants): Things you like that make life enjoyable, for example:

  • Entertainment (dining out, pay TV, movies, etc.)
  • Gym membership
  • Holidays
  • Non-basic clothing
  • Impulse purchases

5. How to Get Started Saving

Make the commitment to start saving today.

Create a realistic saving plan

Calculate your monthly expenses, and compare that figure to your take-home pay. Where can you cut back? A few small changes add up to big savings.

Spend less than you earn

The most basic truth about saving is this: You can only save money if you spend less than you earn.

Start a savings account

Savings accounts are a great way to put aside small amounts of money for the future. Most people complain about expenses at Christmas time but putting as little as $10 per week into a Christmas Club account from early January can give you nearly $500 extra next Christmas.

TIP: Pick an account you can’t easily access so you don’t get tempted to withdraw from it.

Start an emergency savings account

Start a separate savings account specifically for emergencies. You may need urgent home or car repairs or have urgent medical expenses. By putting small amounts away for that “rainy day” you can take away the stress when these emergencies happen.  Add to the account regularly whenever you can and you will be surprised at how quickly your savings will grow.

Put your savings first

Make saving a regular habit and set aside a certain amount every month before you start spending. A good way to pay yourself first is to schedule automatic payday deposits so that part of each pay goes directly into your savings account.

TIP: Think about your savings as an essential expense

6.  Investing in your future

Investing is not just for the wealthy.

If you’re contributing to superannuation or have purchased a home then you have already started investing to build wealth.

The best way to build wealth is to make your money work for you. Stocks, bonds and mutual funds are all common investments that can build wealth over the long-term.

TIP: Always seek professional advice before considering this option

What is the difference between saving and investing?

  • Saving is setting aside a certain amount of your income over a period of time in order to accomplish a goal.
  • Investing is a long-term activity accomplished by having your money make more money for you.

Why invest?

There are many good reasons. Investing helps you stay ahead of inflation, and meet long-term goals like buying a house. Investing also helps you earn enough money to maintain a lifestyle you will enjoy in retirement.

Where do I start?

Education is essential when you are looking to invest. Ultimately you have to take responsibility of looking after your own money and the more you understand the investment choices available the better placed you will be.

There is a lot of information available on the internet and one of the best places to start is the Australian Government’s Money smart site ( or you can seek advice from a professional financial advisor.

Protect yourself

  • Never invest in a product that you don’t understand. If you are unable to explain to someone else the basics of the investment product it means you don’t fully understand it and should proceed with caution.
  • Be sure you have enough information before making an investment. Never be afraid or embarrassed to ask questions until you are satisfied. Just remember- it’s your money.
  • Understand the risks involved in your investment. Investments always contain some elements of risk.
  • Know who you are dealing with. Are you giving your money to a third party or directly to the issuer of the investment? What level of commission is being paid to the person recommending that you invest?
  • When using an investment advisor be comfortable with that person and make sure you are given the opportunity to ask all the questions you need.

Further assistance

If you need further information simply call one of Circle’s staff on 1300 553 582 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it.

Review Widget