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Mybudget
On the fast track to savings
By Tammy Barton


Tony and familyTony and his wife, Rhonda, are both in their forties. They’ve been married for 25 years and have a 17 year old daughter, Alexandra. Tony works as a customer service manager with a large company and Rhonda works part-time as a school administrator. Tony is also the pastor of a church which he and Rhonda helped to establish three years ago. They serve a congregation of about 50 members.

Tony and Rhonda have an affordable mortgage and a small amount of credit card debt which they’re paying off quickly, but they’ve been disappointed over the years by their inability to save. “We never really got into any great debt,” Tony tells me, “But we always felt like we could be doing better with the money we were earning. I tried on numerous occasions to do a budget, but sticking to it was always the issue.”

Tony goes on, “Our approach wasn’t very strategic. In theory, we had a budget and anything left over was supposed to go into savings, but it never worked out like that. We didn’t maintain good self-discipline and we kept dipping into our savings for weekly expenses. The fact that we get paid monthly was an issue as well. Having four weeks between pay cheques seems to make budgeting harder.”

Tony and Rhonda approached MyBudget on the recommendation of friends from their church. Tony explains, “I had just gotten a good pay rise before Christmas and too often in the past we’d let our living expenses match our income. We went to MyBudget because we wanted to develop a savings plan.”

I ask Tony how the budget plan we prepared for him compared with the budgets he’d made for himself. “When I saw MyBudget’s forecast, I thought ‘wow!’ I was pretty amazed that in 12 months, we could save so much. I don’t think we could ever save that much on our own.”

You might be wondering how much of Tony and Rhonda’s extra savings are due to tightening their belts. Interestingly, the answer is none. Tony tells me that the household living expenses allocated in his MyBudget plan are actually higher than the living expenses he allocated in his own budget. The difference is “stickability”. Tony and Rhonda now have a household budget which is workable, plus the support of MyBudget to help with practical matters such as prioritising and paying bills, and allocating specific funds to expenses and savings.

MyBudget also helps Tony and Rhonda to manage their living expenses on a weekly basis. Income from Tony and Rhonda’s pay cheques is deposited into their MyBudget account monthly, but the household’s living expenses are paid into their family bank account every week. Tony withdraws the family’s living expenses in cash every Friday. Each member of the family—including Alexandra—receives their own weekly cash allowance. Money for groceries and other household living expenses are carefully separated. Since joining MyBudget, Tony and Rhonda have not yet had to dip into their savings for extra living expenses.

“I used to follow the idea that the best way not to spend money was to not keep cash in my wallet,” says Tony. “I thought that using a card would mean we’d spend less, but since going back to cash I realise that using a card can lead to impulse buying or buying more than you need—and it’s hard to keep track of what you’re spending.

“Now we only have as much cash in our bank account every week as we need,” Tony continues. “It changes your mindset—when it runs out, there’s no more. So far we’ve been fine—we’ve been disciplined enough to stick to the plan—but we also appreciate that MyBudget is flexible if we want to increase or decrease our living expenses in the future. Plus we have savings to call on now.”

With the confidence that comes from having savings behind them, Tony and Rhonda have cut up their credit cards and now have only a debit card to access their bank account. Do they find this new arrangement restrictive? Tony says that the opposite is true; having cash in their pockets has given each member of the family a sense of financial empowerment, especially Alexandra who, through her involvement in household budgeting, is learning about money management and how to save.

But the most important question is: What are Tony, Rhonda and Alexandra saving for? The first thing on the list is a family holiday in Europe this year. Alexandra is saving her allowance to use as spending money. Tony and Rhonda also have their sights set on property investment. “Now that we’re with MyBudget, we can tell at a glance how much we can afford towards an investment property. Being able to visualise our 12 month budget plan on the MyBudget website is incredible. We’ve never had this level of financial visibility before. As a planning tool, it’s awesome.”

Having savings in the bank is not just about watching a nest egg grow—although that can be rewarding in its own right—it’s about creating financial independence and having choices about how you live your life. So nothing excites us more at MyBudget than seeing our clients reach their financial goals. We thank Tony for generously sharing his story with us. We look forward to continuing to help him and his family accomplish their dreams.

Refer a friend to MyBudget and go in the running to win a $300 Westfield shopping spree. Contact MyBudget for details.

Putting lives back together since 1999. Contact MyBudget today on 1300 300 922 or at www.mybudget.com.au.

Do you have hot tips and handy hints for saving money? Email your ideas to moneytalks@mybudget.com.au.

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