Welcome back.
Note: I am definitely not an expert, nor do I have a degree, however the way I Budget works for us and our household, and I like to think it is a simple way to get back on track. I realise it may not work for everyone!
My first real post and I thought I would do this one separately - WHY? I gathered all my bills and accounts etc for a whole year and this took some time, so I will give you some time to gather all your information.
I will be honest with you, about May 2015 I stumbled across Dave Ramsey. He is an American Finance Author.
A lot of what he has to say is plain common sense but it works, it really does, I won't say it is easy to get started. It may well be one of the hardest things you will ever undertake. It was for me, those first 3 or 4 months were painful (smile).
Dave Ramsey advocates 7 Baby Steps. But before you get onto baby step 1 you need to create a BUDGET - don't you just hate that word? We will call it the "B" word (smile)
The first thing to do is plan, through the years there has been a saying that has stuck in my head:
"Fail to plan, Plan to Fail"
This couldn't be more true. I wish I had taken a photo to show you the mess we had all over our dining table. Scraps of paper everywhere. Why? We were creating our first real budget in a very long time. By the time we were finished it was accurate right down to the last dollar. But it wasn't created without a lot of frustration on both my part and my hubby's.
Firstly:
We took every single bill we have had over the last 12 months and put them on a pile. Some I didn't have paper copies for so I scrolled back through bank estatements. If you still don't have them you may need to estimate them.
These bills were all added up for a yearly total. We get paid Fortnightly in our home so I divided that total by 26 weeks. If you are paid monthly then divide by 12.
Total Yearly bills DIVIDED by 26 (or 12) = Total Bills Category Amount.
Total Yearly bills DIVIDED by 26 (or 12) = Total Bills Category Amount.
That was the amount that I had to put away EVERY fortnight without fail. I did put a little more into this account initially to cover 1 month or else we would have been behind. This took care of our bills and 12 months on I have to say there is definitely a peace of mind each and every time a bill comes in now.
So grab yourself a coffee, a calculator and a pencil and eraser for those who do it old school like me,
or if you are more computer savvy like my hubby then head to your computer and open up Excel(we use both methods here), we are going to make a start on creating a budget - yay!
I will be back soon to get moving past this bill category stage, we should knock the whole budget off in the next post I reckon!
To give you some idea, here is my list of our yearly household bills we budget for:
To give you some idea, here is my list of our yearly household bills we budget for:
* council rates
* Emergency services levy (this may just be a South Australian tax)
* House contents and building Insurance
* Home Alarm
* Car registrations
* Car Insurances
* Car services and wheel alignments/tyres
* Life Insurance
* Gas
* Electricity
* Water
* Phone/Internet
* Ambulance
NEW ADDITION: Foxtel/Netflix
I Hope that has given you an idea where to start, you need to know exactly where all your money is going if you are to do this accurately.
Chat Soon
Melissa
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