Sunday, February 19, 2012

Money Mondays

While visiting my sisters in the mountains a few weeks ago we fell into a conversation about money and why I don't just fly to Melbourne to visit more often. I told them I live on a meagre $500 (about $US540) per fortnight 'but that's after rent etc has been taken out right?' they asked 'no' I replied my $275 a fortnight rent comes out of that $500 leaving me with a pitiful $225 to pay bills, buy food etc.

As you can imagine even with the best laid plans budgeting even the act of eating out is enough to send me eating rice for the second week in the fortnight (or as is the case this fortnight our first energy bill).

So how do I control my spendings? here are a few tips from my brains trust

DIY Piggy Bank on The Little Red House

1. Budget!!!
I can't even begin to tell you how important budgeting is!! We should all - no matter how much you earn, learn how to follow a decent budget. Budgets help put things in perspective for you, go through your ordinary pay cycle but this time keep receipts, keep track of spendings etc and tabulate it all into a program like Excel. Don't forget to include monthly or quarterly bills and even a little to the side for fun things like coffee/takeout/shopping/movies etc. Then go through systematically all your expenses. Where can you afford to save? Set aside a portion each pay cycle for a specified purpose and try to be strict with yourselves.

Even if you can't stay on budget every time, the very act of creating that budget informs you about the state of your finances

I find this site and it's budget tool really helpful, though if you want to keep things simple just go into templates on Excel and search budget.    

2. Make Menus
At the beginning of your pay cycle make a menu. You don't have to stick religiously to the menu, we don't, but try to include things you know everyone likes, that are easy to make, have leftovers and meals that use similar ingredients. That way if you decide you don't want to have spag bol you can still make hamburgers etc.

By writing up a menu you also limit the amount of stuff you don't need that ends up in the trolley

One of my favourite dirt cheap meals is dhal and rice, not the most vegetable filled food but still relatively good for you my favourite recipe is here. The good thing about it is I can make it at the start of the week and be eating it for lunch for the next 5 days 

3. Think about the future.....
Ok so thinking within your next pay bracket is all well and good but like any goal you need to have something to strive for! Are you budgeting simply to keep food on the table or are you feeling like you need a whole overhaul of your finances? Do you have a large amount of personal debt amassed? Do you really want to take an overseas holiday? Saving for a new car/house? If you have something on the horizon to drive your budgeting you are much more likely to stick with it. It might seem dull and constraining to know that for the next 5 years all your spare money will be funneled into your mortgage, but take the time to look at how much you will be saving on interest and the free cash flow available when you reach the end of those five years.

Joel and I are saving towards our first home, we have a dedicated account the money goes into, neither of us are allowed to touch it and we made sure it was a high interest/low transaction fee account. We are driven to save because Joel wants a puppy and I want to be able to decorate and because the more we save the less we have to borrow. 

4. Capitalize on what you already have
Do you have mad talents creating things? fixing things? Or do you have a lot of stuff just laying around? Turn your unwanted things and your talents into cash. Do you have space for a veggie garden at home? for a small investment you can grow your own food. Does your job have the capacity for overtime? take every opportunity you have to increase your income. Sacrifices now will have big pay-offs in the future. Take a cue from business thinking bring forward income and delay outgoings, if you think paying that big energy bill in one pay bracket is going to hurt big time don't be afraid to ask for an extension. Or better still see point number 1. Budgeting, break your bills up into manageable segments and put aside money for them each pay bracket .

We purchased rather than hired a lot of stuff for the wedding as it was going to work out roughly the same price. Now we are selling chairs etc along with furniture from our downsizing move. Though we are using the proceeds to buy new space saving furniture we are saving ourselves the outlay by 'recycling' the money.

Tiny and Tough

Don't get down about lack of money if you work hard it's not going to last forever and the best thing about it is the creativity it unleashes. Embrace that. 


No comments:

Post a Comment