The latest budgeting advice from Bills to Pay founder Kris Bondin, qualified CPA.

The word “budget” can be very daunting on people and as a result, the exercise is often put on the back burner for another day. This procrastination can lead to a series of financial problems such as not being able to pay bills when they fall due and in some cases missing debt repayments.

The fact of the matter is, that many Australian’s do not have a budget. To improve your financial wellbeing and to ensure you are always on top of your finances, here are some quick tips:

How do people budget?

The main reason people seek budgeting help through Bills to Pay is that they do not have control over their finances and lack some discipline.

In most instances, this is because people don’t have a budget. The best way to implement a budget is to firstly invest time understanding where your money has previously gone (what has been incurred and the regular frequency). This data can be found by reviewing previous bank statements and credit card statements, at least 3 – 6 months of data must be collected. When you have the data it is important to allocate a certain amount of money for future expenses based on how much you have previously spent, an example would be if your regular bi-monthly gas bill was $200, plan for an increase as well as allocated the expense in the month it is next due.


How do we deal with expenses that are overdue or unexpected?

Many of the clients I help budget come forward as a result of an unplanned event such as getting divorced or losing their job. This can cause a huge amount of financial stress on a person or a family. If it is clear that a expense can’t be paid when it is due, the best advice I can give with regards to budgeting is to contact the service provider or the financial institution and clearly advise them of your situation. They may offer a payment plan to alleviate some of that stress until things get back to normal. Such tasks like arranging payment plans can be very time consuming, that is why it is important to seek expert help rather than ignoring the issue, you want to avoid getting a credit default against your name. 

How frequent should we be monitoring our budget?

What people shouldn’t be doing is creating a budget and then leaving it in the top draw for another day. The importance of monitoring your budget is to ensure that you are aware of future expenses and to be on the front foot when it comes to ensuring you are on budget, if not you have the ability to make changes now than when a problem occurs such not having the ability to make payment of your next bill.

How can we reduce our expenses and save?

The first step when you have all your historical data is to review the structure of your debts. There is a word that people use loosely, that is “Debt Consolidation”, this can easily free up cash flow in the short term, but the long term consequence is that you end up paying much more in interest. Debt Consolidation only works when you have an aggressive plan to pay off debt by having a realistic budget paying down the debt quickly, this could save thousands of dollars a year and years off your mortgage.


If you’re not in debt, the other way to save money is review items such as electricity, gas and private health insurance to name a few. By comparing different products in the market can again, save hundreds of dollars each year. The key is knowing what you are paying for (rates and discounts).

Is there a way of getting out of debt via a budget?

Absolutely, the first way is to stop using credit cards and use cash. The cash allowance system we use at Bills to Pay gives our clients the ability to use cash for everyday incidental expenses such as fuel and grocery shopping, the balance is left with us to pay down debt aggressively according to their budget and affordability, this way the client benefits from only spending money they have access to and spending more on things they need rather than want.

In short, it is much better long term to have a budget and knowing where your money is going than to not have one.

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