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Budget Theory to grow savings for those with minimal debts

Updated on September 28, 2012

Budget for savings

New to budgets. New to big bills?



This budget is designed to prevent living paycheck to paycheck. To be prepared for the bills as they arrive while saving and having left over money to live a little.

I find I am very attached to the numbers increasing in my account. When they rapidly drop, so do my spirits. Unless I am prepared for it the loss or am receiving something of benefit, in the exchange.

This budget works for people who have no or low debts, and are able to keep on top of the money as it goes in and out.

We started out with labelled envelops, that matched a budgeted amount. Each pay we withdrew the entire income amount from our bank. Please note: This is insecure way of holding money however an excellent way to learn this budget in a hands on capacity.

After a while we started a spreadsheet on the computer as the money in the envelopes was growing so fast. We could be earning interest on that money. This is also a far more secure and smarter way of keeping your money. If you follow the banks rules, not sharing pins, and not keeping them written down in insecure places - like your wallet for instance.

We started running a cashless system, using our debit card. In accordance with our monthly limit on EFTPOS transactions. It works really well if you keep track of them and don't just swipe willy nilly. If you do use your ATM card you will also need to know your bank fees, for how you use your card or bank account in general.

Survival Budgeting

This particular budget theory - is based on a survival mode, its not a place you want to stay but a great place to start. We set ourselves up that our expenses would not exceed the dole - as a back up plan if things went wrong. The “dole” in Australia is about $400.00 per fortnight per person over a certain age. Thankfully nothing went wrong and we were able to explore more budget theories.

When we got married we had very few debts and a small income. We were ineligible for the dole. However I based my budget theory at the stage on the fact that if I lost my job we would not be in debt or have to move in with relatives. We had little overheads, we lived within the budget in a worst case scenario. We were still able to spend a little, and do spontaneous things. The aim was to never stay at this budget; We had big dreams of owning our own home.

I remember this budget because I wrote it so many times and checked it every pay, and every time we spent money. (This is in Australian dollars and is a few years old)

Rent $260 per fortnight
Food $75.00 per fortnight (this consisted of a lot of mince, lentils, chick peas, rice and pasta.) We also grew veggies, however were home so little they would seed on there own.
Electricity $25.00 per fortnight for quarterly bills (I was very frugal and turned everything off at the wall. So our bill was around $150.00 each quarter)
Gas $15.00 per fortnight (we were on gas bottles which are more expensive than mains gas.)
Petrol $150.00
Bus Tickets $60.00
Car Registration/insurance $35.00 (we only had 3rd party insurance on our first car.)
Medical $20.00
Clothes $20.00
Presents $20.00
Holidays $75.00

As we went through with this budget people would ask us if we'd like to do certain things, and I would reply "yes we have money for that." Or "No we don't have money for that." Which was based on how much was left in that particular budget area.

This budget includes the bills that come up annually, they are not surprise bills. Your budget will look different to this budget and things to think about are; when is your drivers license due for renewal, what have you included that under? Any other memberships that you pay? Club fees? School fees? Save for goals like holidays if you can. Budget in the bills you owe.

Sometimes when things were tight or a lot of bills came in a row, I could take money from somewhere else in the budget. To ensure that we were able to afford all our bills, I would put the offending bill that hadn't quite accrued all its money in deficit money until the monies accumulated again, through income.


When finding yourself with a surprise bill (and this budget theory is working)


If a bill that is not in the budget arises, like a speeding fine or extra medical expenses.
The you need to take the money from somewhere. The choices are not always as they seem. You would be tempted to take from rent as it is the biggest. This is the worst choice – this bill is a constant it never gets smaller, and it will grow by the same amount next fortnight/week/month, plus you will owe the money twice. A very bad trap awaits to not pay the rent.

It’s not ideal to take money from food either. However I know people who ate 2 Minute Noodles, for a month to afford to pay for a Pool table.

My first place to take the money from would be clothes, presents or holidays, this is worth in this budget $115.00 and possibly not even accrue them if things were incredibly tight.

If you take it from the others, you need to consider when the electricity account is next due, when the gas bill is coming next, when the registration/insurance is next due. Can you save money on petrol? On bus tickets? A lot more organisation goes in to it. If you stick this out at the start and see the accumulative effects. You will find it a lot easier to have the flexibility to spend money within reason as you please.


If you require more information please check out these:

Biggest budgeting mistake



Everyone has a few surprise bills or the big bills all come at once before you have had a chance to save up for them. If you notice in my original budget, there was no car maintenance fund, yet we were driving a ’86 Ford Escort, and it had issues! The money in the account quickly reduces to zero. It’s a horrible feeling because you were working towards your goals but now everything has stopped in its tracks or so it seems.
Don’t let it ruin everything. It hasn’t. Now that the big bills or surprise bills have come and gone the budget will recover.
Don’t make the budget ridiculously tight, or you will splurge, then feel guilty, and repeat the cycle. Make it manageable, give yourself space to spend money, save and pay the bills.

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