One of the most common stress factors in a family/relationship can be finances.
The word “budget” tends to make most of us do what I call a menopausal eye roll (better things to do and boring) however if your finances are not on track it puts enormous pressure on everyone involved and also means that you often miss out on the things that you really want to be doing in life.
I have a simple strategy for getting finances on track and have shared my tips with you below.
Once again, I know this is boring but you will love me forever if your finances start working for you.
You can modify this strategy to suit yourself and your own financial situation but this is what I generally do with our clients to help them get on track and it usually works well and they love the financial freedom of being on track with their money.
Firstly you need to work out an income and outgoings list:-
- Write down all of your income including wages, Centrelink etc.
- Write down absolutely every expense you can possibly think of including food, petrol, car rego, insurances, electricity and any other things you can think of. What I suggest for this go to my website and go into calculators and go to “Budget Planner”. This takes you through a tabbed format and covers pretty much anything and everything you can think of for expenditure then you can print out a full list at the end when it gets to the summary tab.
- Next to each expense write either A, B or C. Write an A if the expense is for general weekly spending like food, petrol, weekly entertainment money etc., write a B for “bills” such as electricity, rent, phone, internet and write a C for savings for special annual things such as holidays, Xmas, birthdays , special events etc.
Your budget needs to work on the same time frame as your pay. So, for example if you are paid weekly then you need to budget weekly too (or if you are paid fortnightly then budget fortnightly)
The next step is to set up your banking on Auto Pilot…
You set up 3 savings accounts:-
A – Weekly Spending Account – Your wages go into this account and this is where your weekly spending for food , petrol will come out of (All the A expenses) – if there is no money in A then you can’t spend it no matter what it is.
B – Bills Account- you work out how much your bills are on a weekly basis in total then you put that amount into this account each week and don’t touch it unless it is for a bill – this way you are not likely to overspend out of A for your bills
C- Special Savings Account – you put the amount for C into this account each week as well so that you are not likely to spend this and then when birthdays/Christmas come up you have money in this account for these purposes.
Pay Bills Weekly Where Possible:-
I also recommend that you pay most of your bills weekly/fortnightly if you can. You can pay things like electricity, phone and other bills via b-pay and set it up so that it comes out of the bills account automatically once a week/fortnight . For example with my electricity and rates, I work out how much they are weekly and they come out of my account via b-pay weekly. When the bill arrives I am usually either slightly in credit or owe a tiny bit on the account depending on how closely I have worked out the amount.
Please feel free to share your success stories with me and also share any problems you are having.
If you want to make an appointment to come and see me in person, on the phone or via Skype I am most happy to work it all out with you.