Tips for Setting Financial Goals and Budgeting

A lot of people make New Year’s resolutions around money. In fact, two in five (42%) Australians reported wanting to save more money or reduce their spending in 2021. 

Setting financial goals and developing a budget are great ways to take control of your finances. It can also help you keep track of your gambling habits and set limits.

This can help you understand your spending patterns, decide what’s important to you, and make changes to get closer to where you want to be. But it can also be hard to know where to start.

We hope this advice from Gambling Help Financial Counsellor Vicki helps if you’re thinking about setting a budget and making some financial goals for your future.

Why are financial goals important?

Before you create a budget, it can help to think about the financial goals or milestones that will bring you closer to your ideal future.

“Setting goals can help instigate new behaviours,” Vicki explains.

“Goals help align your focus and promote a sense of self-mastery. Goalsetting is a motivational tool that can improve your mental health and your level of personal and professional success.”

Research has found that setting goals is linked with self-confidence and motivation. It also shows that you’re 33% more likely to achieve your goals if you write them down along with a plan, rather than simply thinking about ideal outcomes in your head.

Vicki recommends setting short-term and long-term financial goals.

Examples of short-term financial goals might include:

• Paying off unsecured debt (e.g. credit cards and “buy now, pay later” schemes such as Afterpay, Zip and humm)
• Setting up a savings plan and schedule
• Setting up a regular investment plan such as managed funds
• Salary sacrificing into your superannuation (if possible).

Examples of long-term financial goals might include:

• Going on a holiday
• Upgrading your car
• Buying a home.

5 Steps for a Successful Budget

Creating a budget can help you track your spending and make plans to put your money toward the things that are important to you.

Here are some steps you can take to help set yourself up for success.

1. Assess Your Income

The first step is to understand your financial position and calculate how much money you have coming in each month. This might include:

• Earned income from employment
• Government assistance
• Disability benefits
• Money from other sources.

Once you have an overview of what’s coming into your accounts, you can look at where it’s going and how you’d like to allocate it moving forward.

2. Calculate Your Expenses

“Your money tells a story,” Vicki says. “What do you value?”

You can determine how you currently spend your money by reviewing your financial records.

Expenses might include:

• Mortgage or rent payments
• Car and other loan payments
• Insurance payments
• Bills (phone, internet, utilities)
• Subscriptions (Netflix)
• Kids’ schooling
• Groceries and takeaway
• Entertainment
• Clothing
• Gifts.

You can also keep track of your spending in a diary or spreadsheet for a month to see where your money goes.

“Write down your fortnightly amounts and then multiply by 26 weeks to see your annual spend,” Vicki suggests.

3. Factor in Your Financial Goals

Once you see your spending patterns, you may be able to adjust expenses that don’t align with your financial goals.

Make a list of the financial goals you’d like to achieve. Remember to break these up into short-term goals (e.g. paying off a credit card) and long-term goals (e.g. buying property).

Determine how much money you’ll need to achieve these goals in a reasonable timeline depending on your income.

“A common mistake is setting a budget that’s too restrictive,” Vicki says.

“Rather, understand what you value by working out where your money is going, then use this information to set more realistic spending amounts. Once this is achieved, you can start to consider making a shift by reducing your spending in areas you can change.”

4. Pay Yourself First

Once you’ve determined how you’d like your money to be allocated to achieve your goals, it’s a good idea to set up a savings account you don’t touch.

It can help to have a certain amount of money automatically transferred into that account as soon as you’re paid.

If you need support working out a savings plan, talking to a financial counsellor can help.

5. Monitor and Adjust

Keep an eye on your financial situation at the end of each month to see how your budget is working.

Remember that your budget can be adjusted to suit you, so stay flexible. Things are bound to change, so think of your budget more as a guideline than a lock-in contract.

If you’re struggling to change your spending habits, Vicki recommends learning to manage your thinking around money to be more conscious of how and why you spend.

“Question your thinking before you spend. Do I really need this or am I trying to feel good? If I spend this, will it improve my quality of life?” she says.

“Give yourself time to think using the logical part of your brain rather than the impulsive and reactive side. Take time to think and learn to manage your thoughts and emotions so you can make rational decisions around spending, investing, and saving your money.”

Financial Counselling and Gambling Support

If you need some extra support to take control of your spending and improve your money management skills, professional and confidential help is available.

You can learn about our counselling options here, or call the free gambling helpline on 1800 858 858.