The Dreaded Budget

On a scale of 1 to 10 how much do you hate to budget? 9, maybe 10? I know that I'm going to totally regret sharing this little bit of information with you all, but I love budgets. I love sitting down with my calculator and working out all of my income, and all of my expenses.

Weird, right?

There is just something about numbers that I find so soothing. Following, or sticking to the budget, is so much harder. But, I do okay most of the time. I thought that I would share with you all how I do my family budget. As it's only me and Munchkin, it tends to be a lot simpler, however I am currently in the process of getting my financial situation back out of the red so I have to budget as to what bills my money goes on.

Please note: I will not be showing my budget, with current figures and bills. This post is showing you the process I use and how I do it. 

I budget once every two weeks. I am paid fortnightly, so only have the need to do it at this frequency. I have two plain exercise books. One is where I write down all of my fortnightly budgets, assessments of my financial situations and updates of my current over all budget. The other book is where I record all payments that I make.

When I start an overall budget I do four things.

1. Assess my current financial situation

Make a list of any debts that you have. Credit cards, loans, mortgages, money borrowed from family, anything. Come up with a total. I call this my Total Debt (yes I know, obvious). I reassess my financial situation monthly. You may not need to do it as often, but I find it changes so much from month to month and it gives me motivation to see it continue to go down regularly.

2. Come up with a budget

List your income, and list your expenses. It really is that simple. Calculate how much all of your expenses work out to be on a fortnightly basis. This means you can put money away for all of your bills to ensure they are covered when they come in. Include everything that you pay throughout the year. Things like electricity and water, do an average and work out a fortnightly figure from that.

3. Come up with your financial goals

And be specific. If you want to have $15,000 paid off of your car loan by the end of the year, write it down and work out how much you need to pay on the loan fortnightly to achieve this. Make sure your goals are achievable, but also set them high, so that you are motivated to follow them. For example, if you do your calculations and discover you can easily pay off $15,000 by the end of the year, make it your goal to pay off $17,000. 

4. Maintain your budget fortnightly

Once the previous fortnights bills have been paid, I then set out on the next fortnights budget. I have a set amount for expenses (which includes bills, groceries, fuel, etc) and the rest I allocate to different areas. I also state which bills will be due within that fortnight, before the next pay comes through.

Recording Payments

I do all of my banking online. When I pay a bill, I record all of the information and receipt number into my book. 

This means that I can easily find a payment made, without having to pull out all of the filing and find that particular bill.

Just a few tips

• Remember that this is simply how I do my own budget. I am not a financial adviser, and your budget is possibly a lot more complicated than mine. But I just wanted to share with you an easy way to track your finances.
• I keep all bills to be paid in a red manilla folder on my desk. This means that they are all in the one place, I always check it when I am doing my budget and it means that I don't have my bills out on show on the fridge for all visitors to see.
• Reassess your budget every six months. Things will most certainly have changed. Your income or your expenses. Even if they haven't changed, you need to see whether you are on track with your financial goals, and assess whether they are still important to you.