Spending Ban Jan - A beginners guide to creating a household budget and saving some Dollars
WOW it’s 2015!!
Has the New Year hang over passed yet? Has it dawned on you just how much money you spent in December? Have you received the January bills yet?
Well I say yes to all and raise you a “I have extended my Maternity leave until December 2015”.
As I sipped my coffee on the 1st of January it dawned on me, we are a one income household and my husband refers to me as “the human stimulus package” (I miss Kevin Rudd).
And so my number 1 2015 New Years resolution is “Ban all unnecessary spending in 2015 by planning my shopping trips in advance and by cutting down on take away & restaurants. At the end of each month I will deposit all the saved money into our holiday account to save for the family holiday after Charlies transplant.”
Rules are as follows:
No spontaneous shopping (no matter how good the sale is)
Document all the purchases of the day
Create a monthly budget and stick to it
Reduce take away & restaurant visits
No more internet shopping
With all that in mind I have suggested to take the home finances on and create a budget.
How hard could this be? I have managed million dollar projects successfully. Although it’s always easier with other peoples money.
If you are in this with me and want to keep me company you’ll need a cup of coffee, paper, pen, calculator and access to your online banking.
Step 1 - If you are organised like me then you’ll go to your home management folders and write down an average monthly spent from your utilities bills.
Step 2 - Log into your online banking and document all your direct debits on both your credit cards & your account. NOTICE: any unnecessary spending?….Who the hell is Bollard Group Pty Ltd they have taken a lot of money from me it MUST be a mistake…OH WAIT NOPE clearly I have a problem called Chocolateria San Churro
Step 3 - This step can be done manually or on your computer. You can now enter all your expenses under subheadings such as Home/Rent, Phone/Internet, Utilities, Transportation, Insurance, Loan Payments, Food, Entertainment and so on.
Step 4 - Document your income (salary, rent from investment property, shares)
Step 5 - Add your income total and your expenses total now subtract expenses from income. What you have left is your disposable income. Disposable income is money you can spend on what ever you like. But best would be to put it into savings or your mortgage.
Step 6 - WOW the disposable income looks small. You may have no disposable income left or even worse you are looking at a negative number. This is the time now to re-evaluate your spending. Where can you cut cost or save some money. In my case I have decided to look at the insurance we pay. It seems quite high so tomorrow I’ll be online researching better options, I’m hoping to save at least $200 a month. Are all the purchases you are making absolutely necessary or can you live without them?
Step 7 - Now you can start tracking your spending. You can do this either on your phone or take a small piece of paper around with you and write down every time you purchase something or pay a bill. You need to note what you bought and how much it was. At the end of the week you will add all your spending up for a weekly total.
Step 8 - At the end of the month you will add all the weekly totals and update your budget sheet with your actually spending. Now you need to calculate the difference between your forecast budget and the actual. You do that by subtracting the actual from the Budgeted, the difference will indicate weather your budgeting was correct or if you under/over estimated your numbers. This will make it easier to make a more accurate budget for the following month and any savings you made this month you can transfer to a separate account and start saving for a holiday, a shopping spree or a rainy day.
I hope you guys are as excited about this project as me. I sure can’t wait to see how accurate I have budgeted at the end of January.
NOTE: No money was spent in purchasing any of the props featured here, well technically not this month.
But if you are interested in where I got them here are the links:
Planner is by Erin Condren
Budget Book and pen is by Kikki.k
Calculator is by Daiso