How spending carefully can help your financial wellbeing
Planning your spending (and sticking to a budget) means knowing how much money comes in and how much money goes out. It can help you feel more in control and more confident about meeting your financial commitments, like paying bills, rent or a home loan, without having to borrow money.
A budget is one of the best things you can do to keep your finances on track. It can help you:
- Make your money last between paydays
- Spend carefully on the things you genuinely need or enjoy
- Avoid unplanned debt
- Reduce impulse buys and stress shopping
- Cope with sudden expenses like a family emergency or unexpectedly high bill.
Having a plan for your money can also reduce stress and help you more deeply enjoy the things you do buy.
What is financial wellbeing?
Financial wellbeing is a measure of how comfortably you can meet your current commitments and whether you can continue to do this into the future.
Our research shows two money habits have a strong influence on financial wellbeing – active saving and not borrowing to pay for everyday expenses—.
Tip 1. Understand your needs and wants
Make a list dividing your spending into needs and wants based on what’s important to you.
Needs
Everyday essentials that can’t be skipped, e.g. food, transport, rent or home loan repayments, and bills like power, phone and rates.
Wants
Things that make life good, but you could potentially reduce, swap for something cheaper, or give up.
Goals
Money set aside for future you, whether it’s $5 each payday or saving for something specific like an emergency fund, a holiday, or a home.
Tip 2. Start tracking one type of spending
To help get into the habit of actively checking your spending, pick just one type of spending to track over a week, fortnight or month. If you share costs with other people, work out your portion. Examples include:
- Electricity and gas bills
- Transport, e.g. bus or train fares, parking, petrol or EV charging
- Lunches
- Entertainment, e.g. streaming subscriptions, tickets.
Once you add up how much you’ve spent, it’s easier to see if you’re happy to keep spending this amount or if you’d like to try reducing it.
How to do this in your accounts
You can see a list of your spending in the ANZ goMoney mobile app or ANZ Internet Banking. To find specific transactions, search by amount or the business’ name. If you like spreadsheets, you can download your transaction history from Internet Banking and sort it into spending types.
To make sure you’ve got enough in your accounts for regular expenses like bills, rates or rent, you can set up alerts for when your balance dips below a certain amount. To set up alerts in goMoney, go to Settings > Notifications.
Tip 3. Set yourself a mini challenge
A mini challenge is a good way to try out spending less. It also adds a bit of healthy competition and encouragement – with yourself, with a friend, or as a flat or whānau.
You’ll get to try out saying yes and no, which helps flex your budgeting muscles. And it feels good to work towards a goal.
Examples of mini challenges
Try setting a weekly spending limit for one aspect of your life, e.g. lunches or entertainment. Make it doable with a bit of effort. You could:
- Switch to a cheaper version for the week
- Pick something you enjoy but know you could cut back on
- Check if you’re getting the best deal on a regular bill, e.g. power or broadband
- Try the wish list trick – instead of impulse buying things you want, put them on a wish list for 72 hours. If you still really want it and have money available (not credit card or buy now pay later), go for it.
Keep track of how much you spend and how much you’ve saved in the week.
How to boost your budgeting skills
You don’t have to lock in a plan for every dollar and cent – it’s more about getting into the habit and feeling more confident about choosing when to spend and when not to spend.
Split up your income
Look at your list of needs, wants and any goals. To plan your spending, it can help to split your after-tax pay into three buckets, one to pay for your needs (usually the biggest bucket), one for wants and one for goals.
How you split it is up to you. You could start with an 80-15-5 split:
- 80% for needs
- 15% for wants
- 5% for goals.
You might prefer 70-20-10 or, if you can afford it, 50-30-20.
Crunch the numbers and plan your budget
Our budget calculator helps you break down your spending. Add in your income, your daily and weekly expenses, plus other important monthly costs, to create a budget that works for you.
Be honest about your spending. You’ll be clear about where your money goes and where you might want to make changes.
To be more accurate, it helps to have:
- Your online banking to see your spending
- Recent bills, e.g. power, phone, broadband
- Repayment details for any loans
- Credit card or store card statements to see your spending.
Keep track of your spending
If you can see your budget, it’s easier to stick to it. It’s also easier to spot any unplanned spending and work out any adjustments to stick within your spending limits.
How you keep track is up to you – the main thing is that you actively check how you spend your money. Examples include expense tracking apps, spreadsheets, or pen and paper. You can download or print out your budget from our budget calculator.
If something changes, update your budget
Things change and your budget should too. For example, you may want to set new spending limits if you:
- Get a new job
- Get a pay rise or change your work hours
- Move to a new home
- Have a baby
- Decide to set a savings goal, e.g. an emergency fund, a car, a holiday, or a home deposit.
The cost of living can also change even when your situation stays the same. So it’s helpful to check and redo your budget every six months.
Steps to financial wellbeing
Our financial wellbeing programme can help. Try one step or two, or work through the programme's six steps in any order.
Popular spend carefully articles
Related tools and content
Which saver personality type are you?
Take this nine-question quiz to find out if you’re a Spender, Striver or All-Rounder.
1. Download the Saver Personality Type Quiz (PDF 420KB).
2. Open the PDF in a desktop app, like Adobe, Javelin or Foxit (Note: if the PDF opens in your web browser, select ‘Open in desktop app’ to make sure the quiz can calculate your score correctly).
3. Complete the questions to find out your personality type.
Important information
This material is for information purposes only. Please talk to us if you need financial advice about your situation and goals or about our products and services. See our financial advice provider disclosure (PDF 39.9KB).