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Factor in your income streams
In today’s world of side hustles, odd jobs and investments, calculating your income isn’t always as simple as taking one number from your payslip and dropping it into your budget. For some people there will even be fluctuations in your monthly income whether due to late payments, anticipated sales, picking up shifts, or even changes in the market itself if you’re reliant on investment income.
So when creating your budget, start by tracking all your different income streams over the past year and calculating what you expect to bring in over the next month – this can be based on an average over the past few months or projections based on the work you have coming up. Jot those numbers down as the basis of your budget.
Once you’ve tracked the money coming in, you can add this to the 'income' column in your budget. Depending on the volatility of your monthly income, you might need to find a way to budget that works for your circumstances. For examples, a simplified 50/30/20 budget might help you to stay on top of your important payments, or you might use different income streams for different expenses – for example, a regular part-time job might go to rent and food, while income from your side-hustle might go into savings.
Popular theory has it that the best budgets abide by the 50/30/20 rule: 50% goes to your needs, 30% to your wants and 20% your goals. This easy calculator will help you figure out how much money you have available for each category – just fill in your monthly income. Remember, everyone’s buckets will look a little bit different.
This calculator illustrates a 50/30/20 split but consider what will work for you. You may want to put less to your wants and more to your savings goals - you're the budget boss!
50% needs
These are the important things you can’t ignore. Your home, three meals a day, running water, electricity, loan repayments. If it can’t be skipped, it goes in this bucket.
30% wants
New clothes. Weekly brunch. Concert tickets. Your wants are the things that make life good, but you could potentially give up if you absolutely had to. If you can afford it, set aside 30% of your income for the fun stuff.
20% goals
This bucket looks different for everybody. You might be saving for a house, paying off debt or building up some emergency savings. Whatever your goals are, try to give them 20% of your income.
Tip: If you’ve got a side-hustle or multiple jobs and need help tracking your income as it comes in, you can try using our side hustle income tracker (PDF).
The information set out above is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before acting on the information, you should consider whether the information is appropriate for you having regard to your objectives, financial situation and needs. By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.