The "B" word - BUDGETS! 

Image courtesy of Grant Cochrane / FreeDigitalPhotos.net

With Christmas around the corner, like many people I am very aware of how much money is being spent. However this year I am a lot less stressed as at the beginning of the year I set up a budget and had money set aside, as well as a present budget. This reduced my stress enormously - as I always knew how much money we had, where it was going and what bills are coming up. 

Firstly - let's talk spreadsheets (let the accountants out there wipe the drool!). I created a spreadsheet and set about listing all of our expenses for the year, then dividing them by 26 weeks. 

Bills that are paid fortnightly were listed first. For example I pay our phone bill, water, gas & electricity bills fortnightly. I don't have an agreement with the company, I just pay an amount per fortnight as the billing account number does not generally change (this is set-up via online banking). The amount is based on the last 12 months of bills, then divided by 26 fortnights. Similarly, our mortgage is paid fortnightly, as are our school fees, health insurance etc..

Some bills such as my car rego, house insurance are paid annually. To get around this I have set up an account with my bank (accessible via online banking) to which a set amount is paid each fortnight to cover such bills. So then, when the bill comes in, I have the money waiting to pay. 

Presents/Gifts are also treated like a bill - I made a list of all family birthdays, Xmas gifts and an extra $500 to cover Xmas expenses. This was divided by 26 and this amount also gets put into the same savings account as annual bill savings. This money is discretionary, and the amount you spend should only be what you can afford - be creative, or shop all year to grab things on sale. It's not worth going into debt just so your kids can have the latest and greatest. 

Finally - discretionary expenses - I list these too on my spreadsheet - they include things like groceries (for example - for our family of five, plus three pets, we budget for $500 per fortnight for food and alcohol), eating out, takeaway, clothes shopping, petrol, household maintenance needs (eg gardening supplies/paint), sporting/family entertainment expenses.....  We go through periods when I am happy to leave it all in our account, but at times I feel that we are going out of control with our expenses - then we revert to a cash budget/envelope system - but more about that another day. 

At the end of the day, I make sure that we are spending within our means, plus try to put aside a bit of money each week into a savings account. We try to maintain enough in a savings account for unexpected emergencies (for example, our 15 year old fridge is on it's last legs), but can also dip into it if we get extra high bills. 

I will try to put up a copy of the spreadsheet that I use. When we are extra tight on money I track all expenditure on a spreadsheet (yes - EVERY dollar). 

Cheers x 

PS - We also have some spending money each - we pay ourselves $50 each fortnight each - to do what we want with (eg coffees with the girls, or after-work drinks). That way we can still have some play money. We sometimes slip up but we are human after all! :-)