How often should I use the budget planner?

It’s well worth revisiting the monthly budget planner each time your circumstances change, or before any major life event such as the birth of a child, buying a house or car, getting married or changing jobs. By keeping your household budget up to date, you can stay on top of your finances and always know how you are tracking against your personal financial goals.

What should I do if the budget planner says my monthly expenses are more than my income?

If this is the case, look carefully at all your expenses and see exactly where you are spending most of your money. From there, work out where you can cut down on your expenditure so that you bring your budget back into the black. If you’re paying a high interest rate on multiple loans, it may be worth refinancing to consolidate your debt .

Should I include the cost of my annual holiday in my household budget?

Yes – if you want an accurate idea of how much you spend each year, you should include the cost of holidays in your budget. However, if you are planning to save hard (perhaps for a deposit for your first home), you should consider adding your holiday spending to your discretionary spending list which you can cut out if you have priorities which lie in front of a potential holiday.

Will a lender let me repay more than 30% of my net income on a home loan?

Probably not – the 30% rule, which dictates you should spend approximately 30% of your net income on your rent or mortgage, is a universal rule which most lenders will apply in one form or another to assess your overall financial health. If you spend closer to 50% of your net income on payments to provide the roof over your head, you’re considered to be at risk of ‘mortgage stress,’ which means you’re near a point where you can’t afford to pay the debts you owe. However, this will ultimately depend on how much you earn, as this situation may be different for someone earning $250,000 annually compared to another person with a $50,000 salary.

Should I leave room in my monthly budget for general shopping expenses?

Yes – when you are working out your household budget, it’s always worth allowing a little extra for unplanned items and general shopping expenses. Your budget should not be that rigid or tight that you can’t afford the occasional unplanned purchase of food or household items.

Should I allow a contingency in my budget for emergencies?

Yes – it’s always worth adding in extra in your budget for emergencies or unexpected expenditure, as you never know what might happen. The amount that you allocate or put aside for unexpected speed bumps will depend on your overall disposable income, but it’s always a good idea to have some spare cash at the end of your pay period or the end of the month just in case you need it urgently.