By Katie Smallwood

Chartered Accountant, mum of 2 kids

How to get your family finances in order

Nothing can provoke fear in a grown person more than the word ‘budget’…other than maybe the sentence ‘world wide wine shortage’ that is. As daunting as the task may feel, it is one of those things that can become strangely addictive. This is especially true once you starting seeing results, such as suddenly being able to afford the last bottle of wine known to mankind.

The very good news is that, whether you are creating a budget for yourself, your family or for your business, it needn’t be a very convoluted exercise. I usually guide my clients through the following three main steps. Within these steps you can make your budget as detailed as you would like however the more simple your budget is to follow, the more likely you are to actually follow it!

Part 1: Ready…

For your budget to work in the future it is vitally important to understand what has happened with your finances in the past. This is largely an information gathering exercise and, unless you haven’t paid any bills in the last few years, this step is relatively easy.

Just quietly, if you haven’t paid any bills lately you may want to ignore this blog as you have bigger fish to fry…or you are a lucky bugger reading this for fun from Bora Bora with a Mai Tai in one hand and Channing Tatum in the other.

Firstly, you need to decide whether your budget will run with a calendar year or a financial year. I find using the financial year (in Australia that’s the one ending on the 30th June each year) makes organising your income taxes a far simpler procedure.

Then you need to gather all your receipts and invoices you have paid in that last time period. Most importantly you need bank statements for very account, credit card, home loan or car loan you have. Knowing your current net wealth (i.e. the money you do have less the money you owe to others) when you start your budget is absolutely vital.

Part 2: Set…

Next, you need to summarise the information you have just gathered. To do this I use my trusty excel spreadsheet because I am far too lazy to do any sort of calculation myself. There are budgeting/personal finance software packages around but I prefer to do the initial budgeting in excel and then monitor your spending using these.

There are so many different ways to organise this spreadsheet. I recommend you separate your fixed expenses (electricity, petrol, groceries etc.) from your variable (entertainment, clothing etc.). Another thing I like to do is classify each bill into the month paid by having each month in a separate column. You can see which months are going to hurt the most so you can prepare for them.

Part 3: Budget…

Here comes the fun part. Now you need to actually be accountable for every bank charge you have encountered by using the wrong ATM and every pair of shoes bought, which were on sale so you just had to have them.

There are plenty of software packages you can use to classify every dollar you spend or you can do it manually in your spreadsheet. Either way you need to account for your spending. Every. Single. Dollar. If you can get software that will automatically upload your bank statements this makes everything very simple and if you choose to pay for it here is my last tip – it’s a tax deduction.

So what next? Stay tuned for other blogs with tips for wrangling your spending.


Rose is a Fit Busy Mum of 3 fit kids. She aims to empower mums who are time poor. She acknowledges that mums are ‘busy’ but tries to inspire them to regain their fitness through simple everyday habits that she promotes through her book ‘The Fit Busy Mum: Seven habits for success’. Visit

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