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Video transcript available for Budgeting video Open Close

[On camera: Andy and Anna are walking down a city street looking directly to the camera]

[Andy speaks to camera: We all know managing your money isn’t easy]

[On camera: Anna seated in a cafe with two friends, a plate of food in front of each of them]

[Anna speaks to camera: Whether you’re trying to keep up with these guys]

[On camera: Anna gestures to her two friends]

[On camera: Andy sitting on a couch. There are bills in the couch next to him and one in his hand]

[Andy speaks to camera: Or trying to keep up with these guys]

[On camera: Andy picks up a handful of bills off the couch]

[On camera: Anna is in a second-hand clothing store looking through a rack of clothes]

[Anna speaks to camera: Budgeting can sound pretty boring, but the point is to actually free yourself up to do the things you really want to do]

[Noise: changing room curtain sliding open]

[On camera: Andy exiting changing room]

[Andy speaks to camera: It helps you focus on the things you want to achieve long-term, rather than just the things you want right now]

[On camera: Andy gestures to the sparkly knitted jumper he has just tried on]

[Andy speaks to camera: Like this]

[On camera: Andy and Anna are in a cafe, Andy is drawing on a piece of paper]

[Anna speaks to camera: There are different ways of budgeting that suit different people, but it’s important to know the basics first and foremost]

[On camera: Section of paper that Andy has been drawing on. Cartoon drawing of dollar signs.
The text above drawing says WEEKLY INCOME]

[Anna voiceover: A basic budget should outline how much you earn]

[On camera: Different section of paper that Andy has been drawing on. Andy draws an arrow to a cartoon figure. The text above drawing says ME. Andy draws another arrow to cartoons of a house, a car, a weightlifter and a burger. The text above drawing says ESSENTIALS

[Anna voiceover: What costs you have each month that are essential]

[On camera: Different section of paper that Andy has been drawing on. Cartoons of a desert island and a concert. Andy draws a circle around these and draws exclamation marks inside the circle. The text above drawing says GOALS]

[Anna voiceover: What your long term financial dreams are,]

[On camera: Different section of paper that Andy has been drawing on. Cartoons of a coffee, a shoe, a jersey, a slice of pizza and a soft drink. Andy crosses out the pizza and soft drink cartoons. The text above drawing says MY SPENDING]

[Anna voiceover: and where most of your money is being spent at the moment]

[On camera: Andy and Anna are in a second-hand clothing store, standing facing each other as they look through a rack of clothes]

[Anna speaks to camera: Once you know where your money is going, there’s lots of different ways to manage and monitor your finances. Some people even set up separate bank accounts. And that’s just the basic stuff. There’s more information on our website]

[On camera: Andy is typing into his phone while Anna looks across the rack of clothes at him]


[Anna speaks to Andy: Are you on the website?]

[Andy speaks to Anna while still looking at his phone: No. I’m ordering an Uber]

[Anna speaks to Andy: You literally live around the corner]

[Text on screen: School Leavers' Toolkit logo and]

What is a budget?

A budget is a plan that guides your spending choices to make sure you are spending money on the things that matter most to you, instead of just on random things. Think of it as prioritising what you want most over what you want now. You’ll put some things above others in terms of importance, and save to buy those later, instead of spending now on the items of less importance.

How do I make a budget?

Budgeting is made up of a few simple steps. Here is one approach we suggest.

1) Determine where your money currently goes.

The first step in creating a budget is understanding (and writing down) what exactly you’re spending your money on. You can do this with a notebook and pen, on a spreadsheet, through a fancy app or with an online tool. Sorted has some good suggestions on how to track your money.

If you already have a bank account, and have been using a debit card, you can track your money directly through your account. Sit down and take a look at the last three months of your transaction history from the banking app or your statements. Figure out three things:

  • Your income or earnings.
  • Your needs, or how much you spend on bills, including rent, phone bill, electricity and energy bills, etc.
  • Your wants, or your discretionary spending that's optional or for fun (clothes, cafes, going to the cinema, etc).

2) Set some money goals.

Working out what you want to achieve with your money is important so you can make it happen. Your goals could include anything, though a few examples are:

  • a (new) phone
  • a car
  • travel
  • education or other courses
  • paying off your debt in full
  • house savings.

As you can tell, some of these will take longer than others to save up for. It’s helpful to divide your spending goals into three categories: Short-term goal (less than 2 years to accomplish), medium-term goals (2-5 years to accomplish) and long-term goals (more than five years to accomplish). Remember that your goals should be oriented around what you want to achieve, not anyone else, otherwise you won’t work towards them as well.

Useful links:

3) Determine where you want your money to go.

This next step is where the change comes. Are you spending money on things that don’t mean so much to you and don’t have enough for the things that do? Determine where you want to make changes in your spending and document this in the same format as your current spending (notebook and pen, spreadsheet, fancy app or online tool).

If you find you are spending more than you earn and still aren't able to pay for all your needs, use the following links to find out what financial support you might qualify for from the government.

Useful links:


4) Automate your money.

Next, set up separate bank accounts for some of your different needs. It helps to get your accounts to do most of the work for you. It is ideal to have a minimum of three, and all should be free of fees.

  • Your day-to-day spending account linked to your only debit card. This will be for your discretionary spending (remember those are ‘wants’)
  • A bills account that your regular expenses come directly out of (remember these are ‘needs’)
  • Savings accounts to be used for your other goals. You can always have multiple savings accounts for various goals

Then, have your income deposited into your bills account, and based on what you calculated you actually spend:

  • Transfer an amount (aim for at least 20% total if you can) to your savings account/s
  • Keep enough in your bills account to cover your bills and expenses
  • Give yourself whatever's left to spend on your discretionary expenses, i.e., whatever you want. Put this amount in your day-to-day spending account linked to your only debit card

Finally, set your bills and payments up as direct debits or automatic payments. You'll want these to be as automatic as possible.

5) Monitor and manage as necessary.

If you're looking for ultimate success with your budgeting, make a time every week or every month to track your spending and make sure you're tracking towards your goals. If you overspent in one area, adjust it by taking some funds from another.

If you need more budgeting advice, tools and/or tips, check out the links below.

Remember: This is just one example of a budgeting plan. The important thing is that you decide what you want to try and save for, and budget in a way that works for you.

Useful links:

Where can I go if I get into financial trouble?

If you're struggling to look after your money and are worried about paying your bills, there are places you can go for budgeting help. MoneyTalks is a free helpline available to provide budgeting advice to individuals, family and whānau. To get free and confidential budgeting advice, call them on 0800 345 123, text them on 4029, or chat with them online.

Key Websites

  • Sorted: Sorted is a personal finance site that has the tools and information you need to tackle debt, plan and budget, save and invest, dial up your KiwiSaver, plan for retirement, protect what's important, and take on a mortgage. Sorted lets you fine-tune your finances and get ahead moneywise.