Budget tips for real life

I don’t know about you but I am really starting to feel these higher costs of living.  From filling up my car for $110 instead of the normal $77, to a basic groceries shop going from about $200 a week to about $270 I am really noticing the small things – and so are some of my clients.  In fact, family budgets are all I have spoken about for a week so here are a couple of tips for you:

Talk about it!
Did you know; two-thirds of couples do not talk about money before making a commitment to each other?  * relationships.org.au January 2019 survey Finances& Relationships Now sitting down and having a financial date night is just about the most unromantic thing I have ever heard of, but you are a family now and the BEST way to make sure you are working as a team is to get together and set some goals.

Look through your spending NOW!

Download a spreadsheet of your bank statements or use a resource like our wealth tracker app to get an idea of where your money goes right now.  Make ONE rule – no judgment…no calling each other out on too many lattes or beers – its your money to waste or invest as you want to.  You are capable of change if it's required to meet family goals, and you know everything is easier if you have an end in mind.

Categorise your money into necessary, discretionary, and goals and know how much you spend on each, or use the My Happy Money Journey workbook to do this.

You know what you spend money on – so let's make this budget really simple

If your bank allows it, try setting up three separate accounts: Income and basic living expenses; discretionary spending; and luxuries and savings.

You can set up most bank accounts online. Again, this is your project so might require a bit of trial and error to get the structure right. Monitor how you are spending over the next three or four pay cycles to make sure your accounts are working the way you need them to.

Income and basic living expenses

This is your main account, where your income goes in and your basic expenses come out. Basics for you might be rent or mortgage payments, food (groceries –not eating out), bills such as electricity, gas, water, rates, mobile phone; insurances (health, home and car); car expenses (when they are not a work expense); and family expenses such as school and childcare fees.

Discretionary spending

Discretionary items are things you want but don’t necessarily need, such as dining out, clothes, pets, hair and beauty treatments, content subscriptions, gym memberships, and gifts for others. You may want to put groceries in here too — as it’s a variable cost, and by moving it here your basics account could then be all direct debits.

Of course, some things can merge between discretionary and basic, but what you are really looking at here are your variable expenses: the costs that can and do change.

It’s up to you to work these out. As I have mentioned, you might consider private school fees a basic expense, while your neighbour might consider them a luxury. This is about your values and no one else’s. Keep your money for real luxuries that make you feel good.

So, now you know where your money is going, it’s time to look at small changes that mean your money stays where you want it — in your hands.

Luxuries and Savings

The money in this account could be for the boat, the holiday house, the airfare, retirement, a house deposit or an engagement ring. This could be your running-away-from-home account or your buying a home account. This is where the funds for parties, holidays and special occasions comes from.

Look at the timing of your household bills and your large expenses. Make a list or a spreadsheet of the big ones: rates, car registration, insurances and the like. Analyse how often do you pay these larger expenses — Some bills can be broken down into smaller, more manageable amounts when paid monthly or quarterly. However, some will offer discounts for paying annually up front. Assess what you can afford or what will give you the most flexibility based on your income. You could also set up a calendar reminder for upcoming bills to prevent being caught without enough money.

Build habits that save money

I don’t want to sound overly virtuous or anything (well, maybe a bit) but have started cooking up a storm on a Sunday. I don’t really mind eating the same meal a few times in a week and I live alone (except for the dogs), so it’s pretty easy for me.  If you are a family of fussy eaters, I imagine it might be a little more challenging, but try it — even if it’s

just having some bolognese in the freezer will be quicker than an Uber Eats order.

Think of how you want things to run, where you can make some quick savings and where you have a little treat that just makes you feel good.  Its your family and your budget.

 Budgets don’t have to be overly complicated, they don’t have to be an exercise in shame and blame, keep it simple, know your goals and set it up so its flawless!