Planning is the key to making changes.

If you wish to change in any area of your life then planning is the key & often money comes up in that plan. So to begin anything usually the dreaded word BUDGET surfaces.

Budgeting is not usually peoples favourite thing to do - but it is very powerful. And it needs to be looked at by both partners - not just one person - a joint venture. Often the husband works hard to earn the money & the wife works hard to budget that income - both parties need to be involved & make the decisions. Usually one party pays the bills & keeps the records - but both need to have their finger on the finances. If your family income was a business you would do this.

If you haven't got a budget here are a few tips

Track your spending (very very powerful!!!) Get a system - even a notebook works. For us we use Microsoft Money - because it came with the computer & is what I am now use to. You need a Budget is another good program. Use what ever but do track where your money is going - it will stop the leaks. And often it is the small amounts of spending ie a coffee, magazine, library fines (BLUSH) that is leeching your budget.

We track consistently it keeps our budget on track & I have found it to be powerful & even fun.

Face the facts.
Usually the most unpleasant area of doing the budget - but you really need to face reality. Add up all your bills & debts. Just write them down.

Have you any urgent bills, if so they need to be looked at & actioned - if urgent ie power bill is overdue & will be disconnected - pick up the phone & contact your power board & make a plan with them - usually creditors will work with you if you tell them your plan.

Make a list of all the fixed expenditure - eg mortgage, rates, insurance
List your utility bills - power, phone, gas

Work out each average monthly bill. If you have been tracking very easy to do - if not grab as many previous months as possible & divided by how many accounts you have - eg if you have last 3 months power bill add up each monthly total & divided by three. Take the average monthly figure & work out how much per pay you need to budget eg if paid weekly times monthly bill by 12 & then divide by 52. If paid fortnightly times monthly bill by 12 & then divide by 26. Do this for all your bills.

You will now have a list of all your fixed expenses and an average amount plus how much you need to allocate per pay day.

What about annual bills - eg car registration, life insurance, rubbish collection. Calculate how much per pay you need to allocate for these.

Variable expenses - this usually covers food, petrol, pocket money, hair cuts,clothes, entertainment. Usually when doing a budget it's about here folks get overwhelmed & stressed - keep working on the budget don't give up!

Make it a priority that you get some spending money for things - even $10.00 per week. We also allocated our kids a budget - a clothing & allowance budget (will do a separate post)

Normally folks never have enough money for their budget - no matter what their income is - funny that! So now is the YUCK part of the budget. Look at where you can cut down. For us is was not buying books SOB - we began using the library & now I love it!!! Brent took a smaller car to work - saving on petrol. As the months go by you will see where for your family you can cut back - pay Tv, cell phones, magazines, buying lunches - look at the small things they really do save you the money.

If you have debt choose the smallest debt to pay off first - by paying the minimum on other debts. If you have a lot of debt it is going to be hard to knuckle down but soo worth it.

If credit cards are an issue stop using them. You will be in for a lean few months to get yourself out of debt but soo worth it.

Have an emergency fund - this is important. Do some overtime at work, get a second job, sell things on ebay/trade me - have a garage sale. Aim for $1,000.00. It is for when life happens & you need money. Get this before paying off any debts, it is your safety net. Over time you will add to this but aim for the $1,000.00


Don't give up - budgeting is very powerful - it gives you control.