Budgeting Optometrist


The Budget: First Step to Financial Security

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Budgeting is a way to consciously know where your money is going. It is your first crucial step to gaining financial security.

I want to congratulate you for even clicking onto this post. Bravo!

We will cover the importance of budgeting. We will also run through a step-by-step example that we can go through together by looking at income, expenses and what is leftover.

Why Budgeting is Important?

Formulating a budget is the first step in working on your finances.

A budget:

  • gives you a good idea where your money is going
  • this is done by working out your income and listing you essential and non-essential spending
  • after you can look at what can be saved for the short-term, what can be spent guilt-free and then what can be invested into the future

Without a budget, I don’t think any of this will be possible. This is why it is the first crucial step to organising your finances and building a happier future and a future you want without the restriction of poor finances.

A tool is used to perform a task. Think of the budget as this tool for your finances.

The budget does not control us. If you have tried budgeting in the past, I know how hard it is to stick to the budget. Or feeling restricted because of your budget.

If you do go out of budget, that is okay. In a later video I will show you how to stay on tract with a system you can set up.

Trust me, budgeting is difficult. It is a difficult pill to swallow to see how much money you are spending, but it has to be done. Think about what you want for the future, then the action will follow and we will do this together. Let’s begin!

Setting it up

Let’s start by setting up the budget. I like to use Google Sheets because it is free but feel free to use whatever is similar (LibreOffice Calc, OpenOffice Calc, Microsoft Excel).

We will set this up into Income, which is the money that comes into your bank account and Expenses, which is your outgoings.

Laying out income and expenses

Working out Income

Firstly, we need to know what is coming into your bank account – your take-home pay. This comes after tax, Kiwisaver, student loan and ACC levies have been paid.

We can find this out easily from your bank statements or by using https://paye.net.nz.

You can either enter your hourly wage or your annual salary and it will come up with the amount you earn and divide it into fortnightly, weekly or monthly payments.

I will enter the median weekly earnings, which is $1016 found on https://www.stats.govt.nz, tick Kiwisaver and student loan is this applies. This will tabulate the take-home income, which is the most important out of all of this.

https://paye.net.nz provides take-home income

Working out our Expenses

Our budget so far just has income.

Budget with just income so far

Now, what we need to do is worked out what comes in, let’s have a look at what comes out.

Expenses can be divided into two groups:

  • essential spending,
  • and non-essential spending.

Essential spending is what you must spend your money on without significant consequences if they are not paid. This would include rent because if you don’t pay rent, you will not have a place to live. Other examples include electricity, food, and loan repayments.

Non-essential expenses are those paid for luxuries. This includes any subscription services and gym membership.

Back to our budget, I’m going to use averages. So our market rent is $460 as of 31st May 2020. according to interest.co.nz. I think this is quite a lot of a single person, so I will use half of $230 this value, which is still quite expensive.

Another one we are going to add is food. We are going to use the average from figure.nz of $236 and divide-by this 3 since this value is for a household, giving $76.67.

For the rest of the expense, I am going to make this up.

Now for payments that you make monthly like the utility bill. You can enter this into the formula bar:


The utilities, say $60, then forward-slash (/) 4, which means divide-by 4. This averages the bill over weekly.

Averaging out monthly expenses using the formula bar

Let’s include our other expenses like petrol to work, which is $50 a week, phone bill which is $30 per month. And you will have another essential spending that is specific to you.

After taking a look at the essential spending, it’s time to look at our non-essential spending. This is spending that we do not really need and we consider a luxury. I’m going to make these one’s up, namely subscriptions, which may be $20 a month and I am going to use the trick with monthly expenses using the formula bar.

It might be useful to have a review of you bank statement and see what you are regular spending your money on.

You might have some annual expenses as well. For example, my gym is $500 per year. We can account for this similar to our monthly expenses by instead dividing by 52.

Almost complete budget with income and individuals expenses

Another tip: if you find your expenses are variable. For example, your petrol may vary from time to time, just put down an average erring on a higher value. Remember, this is only a rough guide.

Now that we have are going to total this all up using the formula bar by using the =SUM() function.

Totalling up expenses

Then, we do this for the rest.

Total expenses all worked out

You might have noticed that the values are in two different columns. This simply makes it easy to distinguish the expense items from the sub-totals. Since we now have a rough idea. Now we can work out how much we can save, spend, and invest.

Working out what is leftover from expenses against income

The leftovers are what is going to set you on your financial path. We can increase this by increasing our income or by having a good look at our expenses and reducing them. By splitting up the expenses into essential and non-essential, we can be sure what we can cut out.

For example, do I really need that gym membership when I can bike to work? If I look at my rent, I still have to pay this, but is there any way I can downsize to save more money? The budget will be the key to get you thinking in this way and is your step to sorting out your finances.


I’m very proud of you. To summarise, we understand that budgeting is the first step to improving your finances. It allows you to understand where you money is going. Remember that the budget is not a master but our servant I figuring what is happening with your hard earned money.

We do this by working out our income and having a hard look at your expenses.

Now that we have awareness of where our money is going we can focus on the next step.

NEXT POST: The System: Second Step of Financial Security

I hope you found this useful. Please comment below and share this with others.

Finally, as a disclaimer, I am not a financial expert or professional. This post is for educational purposes only. A lot of what is on here is anecdotal and I would advise you to perform your own research or seek a financial professional.

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