This is something that everyone wants
to do – but sometimes just doesn’t get quite around to sorting it out. Read
this article and take some time this week and look at it. It really is easy and
not as stressful as you might think.
Trust me all your need is a spreadsheet and some envelopes! Yes it is
that simple..... read on for more information.
Finances are hard thing to look
at. Sometimes we are all going from
week to week in the hope that we get by.
Others we are determined to save and then we dip in to the savings. It is so hard to try and start anywhere to
organise your finances. Whether you have
a debt that needs to be paid off or you are just saving for that rainy day or
upcoming events.
Over the years of trying to save
my money I have come up with some ways which have been of use to me. I am going to share these with you and I
hope that you will find them beneficial.
Reviewing your monthly / weekly spend
Look at your weekly / monthly
wage. Review your money, where is it
going, is it being wasted away on unnecessary items or is it going to worthy
causes i.e food. Perhaps you can make
a budget spreadsheet. Don’t reinvent the
wheel take a look at Microsoft Word templates or I can send you mine if you are
interested in it.
If at the end of the above task
you are still unsure where the hell your money is going – download an app for
your phone which will allow you to track each purchase in to a category as you
buy it. Don’t cheat it – you are only
cheating yourself.
Where is your money going ?
Once you have established where
your money is going – you can determine how much needs to go where. Remember there are only a few items which
are a necessity to your everyday life and these are:
Rent / Mortgage,
Utilities,
Child related expenses ( kids
clubs, schools etc)
Loans / repayments
Food,
Car expenses, i.e petrol,
Then you have annual expenses,
Health Insurance
Car service,
School Fees,
If you can think of anything else
add it to the above list as appropriate. Next – put each of the above in a column of
a spreadsheet and then mark the relevant month/weekly out. So your spreadsheet will look like this. ( I
get paid monthly )
|
Jan-12
|
Feb-12
|
Mar-12
|
Apr-12
|
Etc
|
Wages
|
1200
|
1200
|
1200
|
1200
|
|
Rent / Mortgage,
|
250
|
250
|
250
|
250
|
|
Cable TV
|
150
|
150
|
150
|
150
|
|
Gas
|
50
|
50
|
50
|
50
|
|
Electric
|
50
|
50
|
50
|
50
|
|
Child related expenses
|
0
|
0
|
0
|
0
|
|
Loans / repayments
|
50
|
50
|
50
|
50
|
|
Food,
|
400
|
400
|
400
|
400
|
|
Car expenses, i.e petrol,
|
150
|
150
|
150
|
150
|
|
Total Required Per Month
|
1100.00
|
1100.00
|
1100.00
|
1100.00
|
|
Remaining each month
|
100
|
100
|
100
|
100
|
|
Ok so now you have broken down
your expenses every month as the required expenses. You may have more or your may have less – but
notice you put your wages amount in the top row, list all your expenses, and
minus from your wages total, you will get the amount you absolutely require
each month. Some expenses may vary and
leave you with month left over. I will discuss that later.
Savings
You will notice under the
required amount, there is a small section which shows the money that is surplus
to your own requirements – immediately set up a bank account and arrange for
that amount to be taken from your wages each month directly in to your savings
account.
If you don’t have a savings
account, set up one. Take a look around
at what has the best rates and how you can access this money – make sure it is
an instant access unless you really want to see a return on your money. With instant access to your cash, this means
that if it is needed urgently you can access it no problem at all. Take a look at your bank options, and other
banks – look at credit unions and post office – what ever will work best for
you is the one to go for but definitely research.
Paying bills
Dependent on how you pay your
bills, it may online or a post office.
Get that money out straight away – pay your cable tv bill early so you
don’t have to worry about it – same goes for gas and electric. Why wait until the due date as you may end up
forgetting about it and getting charged a late payment. Keep an eye on these bills regularly as you
may find that you have over paid and be able to leave a payment go for one
month – whoo hoo extra money.
For others such as groceries and
car expenses – take the money out of the bank and divide it in to envelopes
with the title of what it is required for clearly marked. So you will have envelope for car expenses
with 150 in it, you will have an envelope for groceries. Now, the important thing to remember is that
once this money is gone.... it is gone.
You can’t rob money from one and put it in the other. If at
the end of the month you discover that hey I didn’t spend 150 on groceries this
month – take that money out and do one of two things with it.
Put it straight in to your
savings account, so you are building a nice little nest egg for those annual
expenses or take some of it and buy a bottle of wine as a treat or put it
towards a new top or dress that you have been looking at.
Annual Expenses
With your annual expenses, I
would recommend sitting down now and discovering how much money you actually
need to pay these expenses. My health
Insurance is over 1200euro annually so I have to budget to ensure that I have
this money ready and available to me by August each year. With this in mind, in my own monthly
spreadsheet I have a column specifically for that – so I know each month how
much goes in to this savings fund for that.
Any extra cash that I have left over at the end of each month goes in to
my holiday savings account so that I have cash to spend when on holiday, or
even enough to pay for my holiday. I
love my holidays each year so I have a column whereby I put a small amount away
each month to pay for a holiday.
People have different methods of
what works for them – and the above really is only the basics that will get you
started and thinking about budgeting and financial planning.
Financial budgeting and planning
doesn’t need to be hard or stressful but you just need to start it and set your
goals. Set out what your monthly
expenditure actually is – set out your annual expenses.
What works best for you with your
budgeting and saving – leave a comment and share with other readers.
S
