Money Management

Best Budget Plan for Beginners

Looking for the best budget plan for beginners? Sometimes getting started is the hardest part. Save like a pro with this easy budget plan designed for any level of income!

I think that budgeting is a lot like crash dieting. You feel really motivated to start off with, so you take away all of the bad stuff and celebrate your new lifestyle. 

Then, a couple of days later, it all gets a bit boring and bland, and if you stay quiet just long enough you can hear the chocolate in the cupboard just pleading to be eaten. 

In the same sense, I believe if you restrict your spending too much – you’ll end up spending anyway.

I have used this budget plan for as longer than I can remember. Okay, I remember. I was 16, on Centrelink and I wanted a cat. 

It was not responsible to get a cat without savings for emergencies, right? So I figured being an adult about it and proving that I could care for a cat would result in me getting a cat. Which, for the record, it did not. 

Anyway, this is all irrelevant. Whether I was earning $200 or $2000 a fortnight, I have always stuck to this plan, and it has never failed me.

So let’s break it down.

The best budget plan for beginners explained

Split Your Income into Three

First, subtract your rent. 

This is a non-negotiable expense. While other bills have providers who can offer a payment extension or plan, rent absolutely must be paid. So when splitting your income, deduct rent first. 

If you earn $1100 and your rent is $200, only split the $900. (random numbers I know but it’s for easy math in the next step)


The three-way split is then divided into three categories.




Place a third of your income in each column. 

Now, add the outgoings that apply to each. For example, Bills would have ‘internet – $80’, ‘power – $100’, ‘fuel – $20’.

Now, if your outgoings for bills are not covered by the one third allocated, you can borrow it from the “Extra” category. 

If you have anything left over from your one-third allocation to “Bills”, move it over to the “Living” category. 

When you need more money, always borrow it from the last category as it is non-essential. Any have extra money, pass it to the next most essential category. Here’s a quick table for example.

Income minus rent = 900 
Bills $300Living $300Extra $300
Internet $100Groceries $150– $10 to bills
Power $100Phone credit $30= $290
Fuel $50= $180+ $120 from living
Loan Repayment $60 = $410
= $310  
+ $10 from ‘extra’  
Split the Extra

Here’s where people make the fatal error. 

Taking all they have in the ‘extra’ category, and putting it away. You are going to crack! I mean, congratulations if you are one of the people who can buy essentials and forget about shopping or coffee for the next month (and please teach me your ways) but the simple fact is, most of us can’t do that.

In the extra category, split it into two. So, in the above example, we would have two groups of $205. 

Congratulations, $205 of that is now your spending money. 

Be free, my little butterfly. 

The other $205, I’m making you split again. Okay, $100 and $105 will do. Pick your favourite of the two ($105) and that one is going into your long term savings account. 

You can never have it back. Well, you can, once you’ve saved what you’re saving for. The other one ($100) is going into your short term savings, for bills and other emergencies that might pop up. 

If at the end of the next pay you have earned enough for all of your bills, living and can put some more into your short term savings, transfer last pays ‘short term’ category into your long term.


I hope this helps some of you as much as it has helped me!

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