And its time for the weekend again. After a lovely weekend at Port Campbell hanging out with old friends, the short week has been and its Friday again, crikey that was quick! Last week I reflected on how special old friendships & shared histories were. And true to form we had a delightful weekend, we didn’t quite manage the midnight pier jump (thankfully) and we’ve upgraded to an amazing house instead of tents but the vibe & joy of chilling with old mates was just the same. And with two new babies in the fold it was even more special.
So how was your Easter & what parts of your life did you ‘water’? If you’re new to this blog, it is all about the idea that the grass is greener on your side of the fence when you water it – by challenging yourself, nourishing yourself with more of the things that you love or inspire you. So, I’m doing this in part by following Leo’s 52 changes for 2013.
I’m making progress & giving it all a go. This is week 14 and the Change is – Budget Simply – which fits well with my goal if getting a bit more financially sorted!
You may remember Change 12 was Paying a Small Debt (see updates here, here and the final round-up here). My credit card was identified as the ‘debt’ target for this exercise. And in trying to figure out how much extra I could pay towards reducing this debt I ended up doing a rough financial plan of my goals – this year [pay off the credit card & cash funded travel!] – next year [more travel] and in the next 5 years [a modest roof & four walls would be a great start on the property ladder!]. It was a bit outside the scope of that change but it helped me figure out how much extra each fortnight I could put on my credit card, which was in scope.
So that should mean I’m fairly well placed for Change 14 – Budget Simply. But don’t worry if you’re starting from scratch, Leo is a champ at providing small, achievable steps to make any change.
So drum-roll please – Change 14 – Budget Simply- is about creating a simple budget & a system to follow it. Sounds sensible but good right?
The key word here is simple. I generally put off doing a budget because A) I put it in the too hard basket; B) I’m in denial about my finances & the potential need to prioritise & say no to stuff.
Anyway the point of this change is to create a simple budget so you can feel confident your finances are in order, you’ve got money for the things you want & you can go on autopilot once it’s set up. Now that’s a good outcome.
1. Set up a simple spreadsheet.
In one column, list your regular monthly bills (e.g. rent or mortgage, power, internet, phone, debt payments etc.). Then list variable expenses (things that change every month) like groceries, eating out, other entertainment expenses etc. in the same column.
2. In the second column, put down the amounts for each. Being sure to put enough for things like groceries and entertainment as you don’t want to be short!
3. Now, list your income sources as monthly amounts.
–> Then add up the totals in the columns. There. You’ve got a temporary spending plan WHOOP! You can add any irregular expenses later, e.g. insurance or one-off things, we’re keeping it simple to start with.
4. Now, the sad part is if the expenses are greater than the income, you’ll need to make adjustments (read: say no to some stuff and reprioritise others) until the expenses are equal to or less than the income. Yep, sucks to be a grown up.
5. What’s left over is spending cash. Maybe it’s for groceries (boring), petrol (yay for my bike!), and fun money (eating out, Thursday night bubbles & Friday night beers, concerts, books, movies etc. – now this is the stuff I like!).
It sounds simple right, but how many of us actually go through the process of setting a realistic budget and reviewing it? Not me.
Leo suggests if you have difficulty not spending your grocery and transport money so that they last for two weeks, put the amounts you think you’ll need in separate envelopes — one for transport, one for groceries, one for fun money. [Good in theory, I might try this, next fortnight]
Other Leo budgeting tips:
– Set up bill payments, debt payments, savings & investments so that they’re automatically taken from your account. If it’s not automatic, you might forget about it. Set a calendar reminder to check on how things are going each month. DONE
– Simplify: see what “mandatory” payments you can eliminate. This might take time, but Leo suggests many things are optional. For example, Leo eliminated cable TV, magazine subscriptions, a car payment (going from two cars to one), and more. Leo also suggests seeing what “discretionary” spending you can eliminate while you’re trying to reduce debt — coffee, eating out a lot, buying magazines etc. not done (yet)
So there you have it Change 14 – Leo’s tips to Budget Simply. It still feels a little painful to me but I really can’t keep being in denial. So I’m getting right onto that spreadsheet (I have a rough paper version) and simply budget! woo hoo. But first it’s Friday and I’ve got my blessed god-son’s Christening over the weekend. So this may be a Sunday night task, but don’t worry, it may not happen overnight, but it will happen. And I’ll report in on Monday. Thank’s Rachel Hunter & Pantene!
So what does the weekend have in store for you? And how do you go with budgeting, I’d be interested to know.
Happy watering, see you Monday! M x