Budgeting

Making a plan to
reach our goals
- What exactly
is a budget?
- Building a budget
- Got the budget,
what’s next?
What exactly is
a budget?
A budget is a plan. We list the What is a deficit?
money that’s coming in and A deficit is when we don’t have enough
plan how to spend it. We give money to cover our spending – in other
each dollar a job to do. Simple! words, we’re spending more than we earn.
Not ideal.
Everyone benefits from having a budget
– they’re not just for people who have
trouble making ends meet. A budget is a What is a surplus?
great tool to make sure we’re getting A surplus is when we have money left
ahead by steering our money where we over – in other words, we’re spending
want it to be. less than we earn, which is helpful.

To build a budget we simply add up how

much money is coming into our household
Setting our goals
(our income), then add up how much Setting goals helps us think about what
money is going out (our spending). Then we want in life and how we want to use
we work out the difference. our money. Sorted.org.nz has tools for
setting goals and helping us work out
A budget lets us see whether we have the plan to reach them.
money left over (a surplus) or not enough
money to cover our spending (a deficit).
The aim is to make as much surplus as
possible so we have spare money to pay
off debt and save and invest towards our
goals.

Find out ...

Am I earning
more than I spend?

Online tools at sorted.org.nz

2 Budgeting Sorted
What we’ll need
For a start there is the Sorted budgeting tool designed for use on a phone – it’ll make this
a lot easier.

1.
A list of what we spend each week. One way of doing this is keeping shopping
receipts; there are also smartphone apps that can help track spending.

2.
Bank statements and bills for at least the past three months. These show how
much we’re spending each month on things like rent, mortgage payments,
hire purchase, credit cards, telephone and power bills, and insurance.

3.
A list of costs we pay from time to time, such as car licensing, medical
expenses, gifts and holidays

4.
A list of any money we get, such as pay, benefits or other government
support, NZ Super or interest on our savings

5.
A list of any money we save regularly

Putting it all together Making a budget that works

It may take a couple of weeks to get all For a budget to work, the information
the information we need. When it’s all needs to be accurate and complete.
together in one place, we’re ready to
This includes little things like ice creams
build a budget.
for the kids or bus fares and money for
parking. A budget also needs to be up
to date, so it’s a good idea to check it
regularly.

Budgeting Sorted 3
Building a budget
1. Our weekly income
Got all that information ready? Let’s work out a budget.
We’ll use this budget sheet or the budgeting tool on sorted.org.nz. And we’ll need to set
some time aside for this, and be realistic about the amounts – it’s important to put down
real figures for this budget to work.

If you receive fortnightly payments, divide them by 2 to get the weekly amounts.
For monthly payments, multiply them by 12, then divide by 52.

Weekly take-home pay (after all deductions) $

Benefits or other government support $
NZ Super payments $
Working for Families income $
Child support $
Board payments $
Interest/dividend payments $
Other income $

Add the above for the total. 1 $

4 Budgeting Sorted
2. Our weekly
spending

Food & housekeeping (include extra milk, bread, etc.) $

Rent/board $
Child support payments $
Fares/petrol $
Personal cash (e.g. cigarettes, entertainment) $
Children’s school books, school trips, etc. $
Children’s pocket money $
Donations (church, charity) $
Work and Income repayments $
Fines $
Other weekly spending $

Add the above for the total. 2 $

Budgeting Sorted 5
3. Our monthly spending

If you pay fortnightly, work out the monthly amount by multiplying

the amount you pay by 26 and then dividing it by 12.

Mortgage payments $
Power/gas $
Telephone (including mobile, broadband) $
Insurances (house, contents, car, medical, life) $
Credit cards: 1 $
Credit cards: 2 $
Credit contracts (hire purchase): 1 $
Credit contracts (hire purchase): 2 $
Loans (e.g. car loans, personal loans) $
Equipment rental (e.g. washing machine, TV) $
Other monthly spending $

Step 1. Add the above for the total. $

Step 2. Multiply by 12 months (x 12). $
Step 3. Divide by 52 (weeks per year). 3 $

6 Budgeting Sorted
4. Our yearly spending

Rates (including water) $

Car licensing and warrant of fitness $
Car maintenance and repairs $
Fees and subscriptions – schools, kindergarten, clubs $
Medical (including doctors, dentist, prescriptions) $
Pet costs (vet, vaccination, dog registration) $
Home maintenance $
Clothing, shoes, uniforms $
Gifts $
Holidays $
Regular savings $
Other yearly spending $

Step 1. Add the above for the user $

Step 2. Divide by 52 (weeks per year). 4 $

Budgeting Sorted 7
5. Our results

Put the total from box 1 here.

Total weekly income 5 $

Add boxes 2, 3 & 4, and put their combined total here.

Total weekly spending 6 $

Subtract box 6 from box 5. Write the answer here.

SUM TOTAL $

Tick the box that’s right for you:

The amount in box 5 is bigger than box 6.

The amount in box 7 is my surplus.

The amount in box 5 is smaller than box 6.

The amount in box 7 is my deficit.

8 Budgeting Sorted
Got the budget –
what’s next?
Now we’ve made our budget, let’s look
at what to do next if we have money left
over (a surplus) or not enough to cover
our spending (a deficit).

If there’s not quite enough money If there’s money left over

to go around (a deficit) (a surplus)

Here are our options: Here are our options:

• Check the budget. Are there • Budgets need to breathe! Are there
any ways to reduce spending? any expenses where a little more
money would make the budget
• Find ways to pay off more debt
work better?
to reduce repayment amounts.
• Use the surplus to pay off debt faster.
• Call 0800 774 004 to check our
entitlements – such as Working • Save and invest the surplus towards
for Families tax credits, the a goal, such as having an emergency
Accommodation Supplement fund, buying a house or saving for a
or Childcare Assistance. holiday.
• Find ways to earn more income. • Get some advice on how to make the
savings grow for the future.
• Get help from a budget adviser.
• Make a date to check this budget in
six months’ time.

Budgeting Sorted 9
Getting help
Family Budgeting Services Budgeting made easy
can help with budgeting, and Budgets can also be built with Sorted’s
it’s free and confidential. Call budgeting tool. Enter in income and
0508 BUDGET (0508 283 438). spending, and it calculates a surplus
or deficit.
A trained budget adviser will answer
questions over the phone or recommend
a local adviser. Family Budgeting Services
Sticking to the plan
has budget advisers throughout New Now that we’ve made a plan for our
Zealand who can explain how to make money, we can use the Sorted’s money
and operate a budget. tracking guide on sorted.org.nz to see
where our money really goes.
Try Sorted’s online tools at sorted.org.nz.

Budget, don’t fudge it!

Online tools at sorted.org.nz

10 Budgeting Sorted
A budget that
just works
Jimmy and Aroha live with Jimmy’s top tip is to be realistic when
their 3-year-old daughter in working out a budget. At the start,
Jimmy and Aroha just wanted to pay
Hastings. When they bought off their debts and they didn’t leave
their first house they decided enough money for their weekly expenses.
to work out a budget together. So they changed their budget to have
a bit more money to spend each week –
Building their budget took time but, once
making that change meant the rest
it was done, Jimmy and Aroha could see
of their budget could work after all.
where their money was going. They found
there were some areas where they could
spend a bit less and put that money
towards paying off debt.
While the budget was hard to stick to at
first, Jimmy and Aroha have now paid off
their hire purchase and saved $5,000
towards an emergency fund that they
can use when they need it.

Budgeting Sorted 11
Where to now?
1. Gather all the information needed –
spending, income, statements and bills.
2. Build a budget.
3. Work out if incomings are more than
outgoings.

Next steps:
e.g. call 0508 BUDGET on (date),
track my spending.

Budgeting
Notes:

For more help, order our Sorted booklets at sorted.org.nz/order

Issued: September 2019