Living on a budget

Creating a budget

Financial worries affect all of us from time to time, but these can be especially acute during periods of unemployment. For many people, sitting down and writing a budget can be a useful activity, helping them to better understand and prioritise their spending and regain control over their finances.

To create a budget, there are two key pieces of information you need to know:

  • Your total income.
  • Your total, current, outgoings or expenditure.

Monthly budgets are the most common, as major expenditure such as rent usually comes out in monthly payments.

Calculating total income

It is usually relatively easy to calculate your total income, as this tends to come from just a few sources and is usually the same from month to month. Make sure you include any redundancy payments across the months they are intended to cover. Also try to find out what income support you will be entitled to and include this.

There are many reasons why people become voluntarily unemployed, including temporary or seasonal work ending, job dissatisfaction or health issues. People experiencing voluntary job loss are usually (but not always) less likely to experience the stress and mental health issues associated with unemployment. But they may still face significant financial worries and need help to get back into work.

Calculating total expenditure

Once you’ve calculated your income, calculate how much you spend. Make sure the income and expenditure time frames are the same. This is trickier as you are likely to have a wider variety of outgoings which will normally vary.Collecting receipts or using bank statements can be a useful way of keeping track of what you’ve been spending.

The key things to remember to include are:

  • housing: rent or mortgage payments, home insurance, loans secured against your home, service charges
  • household costs: food (including children’s school lunches), toiletries, cleaning materials, tobacco and alcohol products and pet products
  • rates
  • utility bills
  • travel expenses: public transport and own car (including insurance, fuel, toll fees, registration/taxes)
  • telephone and internet costs
  • any subscriptions, such as satellite TV fees
  • other insurance, including private health insurance
  • childcare costs
  • leisure costs (regular like gym memberships and one-off like meals out, cinema trips etc.)
  • clothes
  • other expenses, such as medical and dental, hairdressing etc.

Evaluating your budget

Once you’ve worked out your monthly totals, just deduct what you spend from your income. If you are spending more than you are receiving – or if there is not much difference – you will need to think about where you can make cut backs.

  • Often it can help to divide your expenses into necessities (rent, food, utility bills etc.) and non-essentials such as magazines and leisure activities.
  • Remember, you know your own habits and expenses best and are the best person to judge where cut backs can be made.


If you are still facing regular deficits in your personal budget even after cutting back where you can, you are likely to start accumulating debt very quickly.

  • Consider contacting a financial counsellor for further support with budgeting and advice on how to keep debts manageable and avoid incurring high interest penalties.
  • Remember that unemployment is temporary, but as you don’t know how long it will take to find a job, it’s best to keep new debts to a minimum during this period. The last thing you want on going back to work is for your first months’ pay checks to be eaten up by paying off debt.

Why eating healthily is important during unemployment

A healthy, balanced diet can help maintain well-being during periods of stress or worry and is an important tool in combatting the mental health issues most commonly associated with periods of unemployment, such as depression and anxiety. Eating a nutritious diet also helps to keep energy levels high – to keep you going during your job search.

Providing a healthy, well-balanced diet for you and your family in times of financial hardship, however, can seem like a real challenge. Here are a few ideas on how to make sure you and your family eat well, even on a restricted budget.

What does a nutritious, well-balanced diet look like

A healthy diet will include a variety of different foods from these main food groups:

  • Fruit and vegetables, including different types and colours
  • Grain foods, like bread, rice, pasta, cereals, oats and noodles – wholegrains are usually the healthiest option
  • Dairy products, including milk, cheese and yoghurt – consider choosing reduced fat options
  • Low-fat sources of protein, such as lean meats and poultry, fish, eggs, tofu, nuts and pulses or legumes

Other food groups should be enjoyed in moderation. In particular, aim to limit the amount of saturated fats, added salts and added sugars that you consume i.e. processed foods, sweet snack foods and sugary drinks.

Planning to eat well on a budget

One of the best ways to keep grocery costs down is to plan the week’s meals ahead of time and base your shopping list on the meals you’re going to prepare.

You can also plan to buy and prepare food in bulk, reducing costs, and leaving you with tasty, pre-cooked meals in the freezer.

Substitute expensive products for low-cost alternatives with the same nutritional value.Some good examples include:

  • Choosing chicken over more expensive meats.
  • Bulking out meat dishes with extra vegetables, legumes, pulses and grains.
  • Buying fruit and vegetables which are in season – that’s when they’re cheapest – and buying tinned and frozen varieties at other times.
  • Using eggs, tinned tuna (in water), beans, chickpeas and lentils as alternative sources of protein.

Key points

  • Maintaining a healthy, nutritious diet is important to maintaining well-being during periods of unemployment and it can be done on a budget.
  • Planning meals ahead of time and finding cheaper alternatives to your usual ingredients will help keep grocery costs down.
  • It’s important to be a savvy shopper: stick to a shopping list as much as possible and make sure you’re getting the best deal on the products you do buy.
  • Budgeting carefully during periods of unemployment can help to reduce financial worries and make sure you are in charge of your expenditure.
  • To create a budget, you need to make a realistic calculation of both your income and outgoings to find out whether you are spending too much. If you’re in deficit, you will need to go back over what you spend and find places where you can make temporary cut backs.
  • If your budget doesn’t add up or you’re worried about debt, you should consider getting the support of a financial counsellor who can offer you personalised advice on your budget and how to avoid unhealthy debt.

Hints and tips

  • Be realistic and honest when budgeting.
  • Try to set aside some money each month against unexpected and emergency costs, like domestic repairs.
  • Living on a tight budget can be tough. When you have a little extra, consider treating yourself and your family to something special as a reward for your effort in sticking to the budget.
  • Prepare and stick to your shopping list.
  • Try supermarket “own brand” alternatives to branded products.
  • Supermarkets usually put the most expensive products at eye-level, so look up and down the shelves before choosing your product.
  • Check whether special offers really are ‘special’ before taking them up – sometimes it’s cheaper to buy the unbranded product at full price than the branded product on special. Often the best offers for people on a budget are two-for-one on long-life products, like tins, dry pasta and rice.
  • Avoid shopping when you’re hungry to limit impulse buys.

Links to further advice and help

If you would like more support with budgeting or are worried about debt and need advice, help is available through The Salvation Army’s free Moneycare service.

Alternatively, you can learn about and access financial counselling services through the Australian government’s MoneySmart website.

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