My Budget Journey
I lost my husband in 2012 to cancer. My boys were 4.5 & 14 months & after a few months I had no choice but to return to work.
As a single parent navigating childcare, school, a 1 hour bus ride to & from work in a high pressured Corporate role it all became too much. I hit a wall. It was too much for one person to take on. Add to this that my eldest had only started school when his Dad died & was now having serious problems which needed to be addressed. I knew I needed to concentrate on my boys.
Fortunately for me, my work had voluntary redundancy & I was accepted. Now started the real work. I needed to budget out this money so we could survive as long as possible.
I’d always been good at saving & looking after money. I don’t go on wild spending sprees. I’m not one to buy loads of shoes or outfits. I’m a fashion disaster ; ) But if theres a new gadget coming out (like iphone), I’d be itching to get it. Of course the difference was that now I had 2 little ones who came with a range of needs from clothes, activities, birthday parties, etc.
Budgeting became a way of life.
It really helped me streamline my spending & bills so there weren’t any surprises. Its been a few years now since I left work & the money has slowly been spent. Because I’ve been so cautious, we’re able to live off very little each month.
Sometimes I go off track for a few weeks & don’t record my spending, but I always have at the back of my mind the amount I need to stick to on a weekly basis. If I’ve been knocked off course because suddenly my child jumps a whole shoe size in a month (yes, hes now 13 & wearing a size 10 shoe!!!!) & needs a new pair of runners, football boots & school shoes … I go back to my budget & look where I can cut or how to budget it out so I can still pay bills.
Meal Planning also helps to cut down on wasted food. Plus with 2 growing boys, they eat constantly!
I’m not at the point where I can do ‘cash envelopes’ like some families. I’m still living week to week so I have to be very strict & any extra money goes towards building my Emergency Fund.
What is a Budget?
A common misconception is thinking a budget is limiting or complicated. It can be as limiting or complicated as you want to make it. For me, knowing how much you have or how much you can spend it brilliant because you don’t overspend & have to worry about the stress of figuring out where the moneys going to come from to pay for it.
My kids actually enjoy budgeting our shopping. We don’t go for the cheapest products all the time, we still have our favourite premium brands. We save here so we can spend there. I think its a great life skill for them too.
Why do people overspend?
People overspend for loads of different reasons. Theres the emotional spender because they’re bored, sad, fighting with the other account holder. Or the “but it was on sale” spender. Sometimes it just adds up & kicks you in the butt at the end of the month.
I remember when we had a canteen in work & how everyone would be shocked at the end of the month when their lunch bill was deducted from their salary. It the 2nd latte or the extra packet of crisps with lunch … it all add up … and it adds up TO ALOT.
With a budget you have already figured out if that canteen lunch is worth it to you that day or if you could bring in a sandwich from home. Its knowing WHERE you want to spend your money. Its telling your money where it can go! Rather than wondering where it went.
How to start your budget
- Pen & paper … Easy!
- write down every time you spend money (Date, Account, Shop, Description, Amount)
- Monthly Income/Expenses
- plan your income & expenses for the month
- Monthly Bills
- arrange all your bills in date order
- Monthly Calendar
- write down what bills come out on what date & when income is due in.
- Annual/Quarterly Bills
- write these down so you know in advance of them coming up (eg. school fees, summer camps, christmas, holidays)
- Debt – confront it
- Write down all your debt
- Now look back over the all the other pages & figure out where you can cut so you can pay your debts off
- write down all your savings
- Do you have an emergency fund?
- Dave Ramsey is a great place to start
- Rachel Cruze is Dave Ramseys daughter & gives loads of advice from a Mum with kids
- Your local Bank or Credit Union often has budget sheets available to download
- I have a simple Budget Workbook available through my Shop which contains all the pages I use for my own household budget.
- I’ve written a few blog posts about creating a budget. You can read them here : Budget Basics & 42 Forgotten Budget Items
- Its too complicated
- Just take it one step at a time
- Write down everytime you spend money – you’ll be surprised!
- It becomes easier with practice & you’ll feel more in control
- I’ve multiple incomes / various paydates / my income changes
- Using my Budget Workbook theres space for 6 incomes
- Estimate variable income & write it in pencil until its paid in, so you can still see all your expenses for the month & adjust accordingly
- How long do I have to do this for?
- How long do you want to spend paying off debt?
- Its good practice to at the very least sit down at the start of the month & plan out your income/expenditure for the month.
The Last Thing You Need to Know about budgeting
Budgeting brings financial freedom. Spend your money on important things without wondering how you’re going to pay for it.
Cash is & always will be King!
Debt causes stress & marriage breakdowns. Avoiding it only gets you in deeper. Get a handle on your financial health – start today.