Employment Plus - Tips & Tools

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.

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.

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.

Key points

  • 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.
© The Salvation Army Employment Plus 2015. All rights reserved. Site by DGM Creative.
All requests for the use of this material in any form or by any means must be directed to The Salvation Army Employment Plus.