A simple way to organise your finances!
To begin you will need to get your information together.
Write down all the bills you spend in a 12 month period. These are the expenses you know you will have, for example:
- INSURANCE (car, house, personal, health)
- COUNCIL RATES
- WATER RATES
- ELECTRICITY AND GAS
- PHONE AND INTERNET
- CAR (registration, servicing allowance)
- SPORTING MEMBERSHIPS
- CHRISTMAS (estimate an amount that would cover presents/food/etc)
This list will vary with each household, and you might decide to do a separate budget account for Kids schooling (eg fees, books, uniform, computer) or Sports (memberships, uniforms, travel, equipment etc).
When you have the list completed (and check that you have the correct amounts) then add it up. Add 10% to the total (for any discrepancies) and then divide this amount by your pay cycle.
e.g. Total is $6000 plus 10% = $6,600 divide by 26 fortnights in the year = $254
So the amount to deposit in your Budget account is $254 every pay cycle (if paid fortnightly) You will need to let this accumulate a little before you start paying the bills on your list. Once you have it started you will always have the funds for these regular expenses and won’t need to worry about them.
If possible use this account as the Offset account for your home loan so the balance can reduce the overall interest you pay on your loan.
TIPS FOR OTHER EXPENSES
Now you have the main and regular bills under control you can focus on your weekly expenses.
Keep an eye on the small amounts that you spend each day. I always have a coffee every day but I try and take my lunch when I can, to balance out the spending. So decide what is important to you and it will be easier to let go of what you don’t really need.
Groceries: Plan ahead and think about meals for the week before shopping.
Look for specials and buy up when your favourites are on special.
Late in the day the supermarket will mark down the perishable goods like meat, bakery, dairy and fruit and veg. You can always buy near use by date and cook and/or freeze.
Clothing/Hobbies/Entertainment: Again, think about what is a reasonable amount to spend once you have paid all loans, essential bills, have food in the cupboard and put some aside for savings.
A lot of the ‘stuff’ we buy is more about how it makes us feel, rather than if we actually need it. There is a lot of information available now that shows how our spending reflects our emotional state. Be mindful of this and consider if you really need it.
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