How you allocate your money each month is personal. Your spending plan or Budget is dependent on personal circumstances like your values and goals, how much you earn, how much you own, and owe. A good budget can help you achieve your dreams, whether you want to have a baby, buy a new home or take time out to travel. But life can be unpredictable and circumstances change, so it’s important to update your budget accordingly. Track your spending against your budget to identify if you’re on the right track or if things need to change.

Here are the 8 tell-tale signs that your budget needs a health check!

1. There’s nothing left by Payday

If you live from pay to pay and there is nothing left at the end of the month, you need to revise your budget.

your expenses to identify the areas where you could save.

2. You Need Your Credit Cards to Live

What would you do if your car needed a major repair? Or if a parent became ill and you lived in a different city? Would you be able to access some quick cash? Or would you need to resort to credit cards? Or even borrowing from friends?

If you
don’t have money set aside in your Emergency Stash, then adjust your budget to
include building one.

3. There are Trends in your Spending

Do you have the same blowouts every month? Do you overspend on clothes?

 Do the LifeSherpa PEARL test to identify where you
can cut back.

4. Your Income has changed

Getting a pay rise is a great time to rethink things before you get too used to the extra money every month. Use it to reduce debt, or put it towards a specific goal.

On the other hand if your income went down, maybe because you lost your job, you might need to cut back on spending while you get back on your feet.

5. Your Expenses Have Changed

Has something big happened in your life? Maybe you bought your first home, got married or found out you're about to have a baby? Or maybe you have more cash because you’ve finally paid off that credit card debt that was sucking up big chunks of your pay?

These changes are all signs that you should stop and think about your spending. Don’t miss the opportunity to really make a difference.

6. Your Goals Have Changed

Has something big happened in your life that made your priorities change? Having a baby, loss of a parent or the bloom of a new relationship are all triggers to make you reassess what’s really important.  When your goals change so should your budget.

7. You’ve Finally Reached One of Your Goals

Have you achieved something you set out to do?  Paid off your credit cards, got that new job? Good on you! This probably means you’ve got some spare cash you haven’t had before.  Think about what you really want to do with it.

8. You’ve won the lottery or inherited

Whenever you get a windfall, it’s important to resist the temptation to blow it all at once.

Try waiting a while, things won’t quite seem so urgent after a few weeks. Try the rule of thirds – allocate a third to spending now, a third to a medium term goal (like paying down debt or a buying a house) and a third to a long term goal such as retirement or paying off your mortgage.


Vince Scully


With over 25 years in Financial Services from consulting to management, Vince Scully is the go-to guy for wealth management and financial advice. Before creating LifeSherpa, Vince founded the Calliva Group; a fund manager, product issuer, adviser and lender. Vince is an adviser to the Wealth Management Industry, and prior to his role as CEO at Calliva, a senior member of Macquarie Bank’s infrastructure team.

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