Fox says the biggest pitfall is not knowing where your money is going. Writing out your budget and keeping track of it regularly is the best way to heighten your financial awareness.
"When you put down exactly what has to go out sometimes just putting it down on paper in black and white any issues become pretty obvious.
"Once you've written your budget once it's very quick to update it weekly or monthly."
2. Budget for the annual costs.
A lot of people forget to account for yearly one off expenses. Fox recommends adding up expenses like birthdays, Christmas, car warrant of fitness and registration then dividing it by 52. The result is the weekly cost of those one-off expenses that you can incorporate into your budget.
3. Check your entitlements
Fox said if you're struggling to make ends meet find out if you are eligible for working for families or an accommodation supplement.
"Getting that extra money might be enough to make things balance."
Almost all families with children, earning under $57,000 a year, many families with children earning up to $74,000 a year and some larger families earning more are eligible for financial assistance.
4. Manage debt
Smith who has been working at the Papakura Budgeting Service since 1990 said with the sharp increase in rent and food costs unmanageable debt is one of the key issues people are coming in with.
"There's more debt, people take on more debt than they used to. People used to save for things."
She tells her clients to budget for food, shelter and power first, then they focus on how to get the debt down. In some instances they will negotiate with creditors to reduce the weekly amount.
5. Make goals
Your budgeting will be different depending on your short term and long term goals. Fox said to figure out how much you need to achieve your goal then see if it's realistic to incorporate that into your budget.
"It might be replacing a car, having a holiday, buying a house, saving for retirement or it might just be a little thing like not running out of money each week and having enough food."
6. Separate your savings
The easiest way to save is to transfer the money out of your account on pay day into a savings account Fox recommends. If you need to get it back it's still there but it means it can't be spent on a whim.
"They're less likely to dip into it. That's really all it takes."
7. Record your food
Cutting back on food is one of the easiest ways to free up more money said Fox. Write down all the money you spend on your groceries and eating out.
"Analyse how much you spend on takeaways or coffee over a month. When you suddenly realise it's $35 a week and compare that to your supermarket bill that's enough awareness to make things change."
8. Family planning
One of the hardest things can be when a baby comes along and the household plummets from two incomes to one said Fox. She advises to avoid long term financial commitments like hire purchase and work on plumping up your savings. You should start doing this as soon as you find out you're pregnant.
"An old fashioned tip when I had a child is when you find out you're pregnant start living on one income and use the other to save or pay off debt."
9. Four account banking system
Setting up four different accounts with your bank can help you to keep on track said Smith. She recommends you split your accounts into discretional spending for food and petrol, cash flow spending for your rent, power, internet and debts, annual accumulated spending for your yearly costs of car expenses, dental and medical and a savings account for anything extra to stow away.
"That helps you to not dip into accounts that you shouldn't be dipping into."
10. Every family is different
Everyone has different values and goals so there isn't "one way" you should be doing your budget tells Fox.
"It's all about priorities nobody can tell you what your priorities are you've got to decide for yourself and every family is different."
Go to familybudgeting.org.nz/ for free budgeting advice.
