“A budget is just a method of worrying before you spend money, as well as afterward.” I think this probably describes pretty much the way I have viewed budgets in the past. My prefered method was to just pretend that I knew exactly where all of our money was being spent and that we weren’t splurging on things so we should be fine!
Money Doesn’t Grow on Trees!
No money doesn’t grow on trees; gosh wouldn’t that just be wonderful!! But money does grow with knowledge and understanding of how to manage it. Managing money is something that I have never really been great at. I always lived by the motto that money can never buy you happiness, and it can’t! But I have come to a point where I understand and realise that it can allow my family to be debt free, financially secure and a hell of a lot less stressed!!
The thing is though that you have to then have an understanding of how to manage it, you have to know where your money is coming from, where it’s going, what your costs are and how you deal with it in challenging times, otherwise you might as well waste your time trying to grow the world’s first money tree! The first thing I have always done when things were going bad with money was to stick my head in the sand and just pretend like it just wasn’t there anymore. I would tell myself that I was no good at maths, therefore no good with managing money. I would tell myself not to worry something would turn up that would solve our problem or to look at letting someone else managing my money for me. Problem being is if you don’t have a good relationship with money then it will always be a problem for you, you’ll never like “money” (even though we want it) and basically you’ll never have it.
Now let me make something very clear before we go on. I am certainly no money expert; in fact my debt is significant. My husband will love me for sharing 
our personal financial status but the thing is that not only do I want to encourage others in the same situation as me to really look at their debt and find solutions, but I also really need a way of keeping myself on tracking and trying to do this and I guess there is no better motivation than to know everyone is watching lol.
So here is it, our current credit card debt is $21, 885.21 at an interest rate of 19.99% and I owe a wonderful family member who has helped us out $5,000. So in total we owe $26, 885.21. Sound good, ah no! So how do I change it? Well this is what this is all about, learning how to change this, learning how to take control!
So the first thing I have done is to work out how I got this debt. For us a lot of this debt is due to the Autism early intervention costs for our two boys. $10,000 of it is from purchasing a replacement car on our credit card (details here) and the rest? Well I would have to honestly say it is a mixture of bills, not being careful with our money and not having a budget. The crazy thing is that we do not live beyond our means in the sense that we go on shopping sprees, buy lots of clothes, go on holidays, go out for dinner, pamper days etc, we do none of that. A portion of this debt is just from everyday living, groceries, bills and essentials but it all adds up and if you don’t know where you are spending then you don’t know where you can save.
So find out where your money is going. Sit down and think about where you are spending money but the most efficient way to do this is to know for sure where your money is going. So you can do this in one of two ways:
- Keep a note book of everything you spend over a three month period or if you are desperate to get going quickly do it for at least a month
- If you are like me and tend to keep all of your receipts for everything then get them out and either create an excel spread sheet or a create columns in a note book with a range of expense headings. One way to work out what headings to have is to look at what budget planner you might want to use, it will then make it easier to work out your budget once you know what you are spending in each of these areas.
Where do you get a good budget planner from?
There are lots around on the internet so it really does depend on how you prefer to set things out. A great website is Understanding Money ( http://www.understandingmoney.gov.au/). I am currently using their budget planner which you can download as an excel spread sheet. There is also Money at Ninemsn ( http://money.ninemsn.com.au/) which also has a great range of money tools and there are heaps of others around if you do a quick search on the net. Find one that you like and start dividing up your cost headings to your budget plan.
TIPS:
- For your utility bills its best to look at what their totals have been over a 12 month period so that you can budget for an average cost.
- Make sure you know what your car insurance, home insurance, private health insurance, car registration etc cost you as you and you will need to facture all of these into your budget even though you pay them just once a year in most cases. Include any other annual bills or memberships you may have.
- Know what your credit card balance is; look at what you are paying in interest each month and any other costs that you may be hit with to do with your credit card.
It is scary looking at what your expenses really are or what fees your being hit with, especially if you’re like me and you can see areas where money is literally being wasted, like with the interest on my credit card but you know what, unless you know it is there and you know what it is, you can’t do anything about it so it will never change. Don’t see this as a depressing or negative activity see it as one that can change your life, one that can empower you and can help to take you one step closer to your dreams!!
