Posted by Marie Pawsey
Oops! Back in high school I was excellent at setting up a study plan. But I don’t think I ever got myself to actually do the study according to the plan! I needed a different system, one that I would actually use …
Maybe your budget is the same. Maybe you need a different system. Something that’s easy peasy.
Prevention is better than cure. Take the time to set your budget up in a way that will just work for you (and build in a reward for the time you spend). Of course, a budget is sure to need tweaking, especially when circumstances change.
So what is really going on with your budget? A bit of research might be needed.
Check to see that you have thoroughly worked out both your income after tax and all your different expenses …
Perhaps you love a spreadsheet and it really works for you – brilliant, use it.
Like the kids who put their money in labelled jars so they can see what they have to Save, Spend and Share, you can group your expenses. You could use a version of the envelope system that my mum taught me! But maybe instead of cash in envelopes with labels on them, you use accounts. However you work it, grouping your expenses has to be logical for you, and if it’s not working you can adjust it.
For daily money (for my day-to-day bibs-and-bobs), I am trying out using cash again. And it’s working. When I withdraw the cash, I ask for the specific notes that I’ll need and put them in their own wallet, so they don’t get mixed up with other cash or cards. I can see how much I have left and adjust what I spend to make it last until the next refill. (Yes, it can mean just the coffee and not the cake – but I’m still having time with friends J) Sometimes, I’m even a bit ahead … how about that!
One group of expenses is routine bills. Mine all come out of the same account. At the end of the year, I print out my account statement for the year and tally up each of the expenses – rates, energy, insurances and so on. Then I do the maths and round them up a bit to make sure enough will be transferred per pay to cover those expenses for the coming year - even if all the bills arrive at the same time!!!
My savings for the big expenses are in an account that is a bit harder to get to – so I am less likely to get money out on impulse. I have a regular amount going in from my pay. And then I am surprised when I see what I have managed to save up!
The unexpected expense can be a shock. So, having an account (or even an envelope) that collects money for the unexpected but necessary, like a plumber or electrician, is so handy.
Paying off debt needs to be a priority, if only to get rid of the worry. So work out what debt you have and plan how you will pay it off. Including the sneaky debt of a credit card.
Whatever system you use, it has to work for you in an easy peasy way that everyone involved understands.
Even your littlies could learn the system. Like when there is nothing left in ‘play money’, then it’s time to make your own fun!
For all kinds of financial information, we recommend the federal government’s ASIC MoneySmart website https://www.moneysmart.gov.au/ for so many realistic tips and ideas for everyone! And for those who are worried about money, this site also gives contact details for help.
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