Ahhh Budgeting...The dreaded word

That dreaded word. No one in their 20’s wants to live by a budget. How much more fun is it doing what you want when you want and not having to check if your last minute dinner will fit nicely in the realms of the dreaded excel spreadsheet. I don’t know, maybe I’m wrong maybe it was just my circle of friends that was all about living in the moment and dealing with the aftermath later.

I lived like this all of my life, I didn’t have the faintest idea on how to create a budget and nor did I care. Sure there were times (usually closer to pay day) where I thought that I really should work out how to create a budget but thats about as far as it went for me.

So when my friend had said that she could help me, I decided to listen.

Firstly we had to write down all my expenses and then arrange them into groups of importance. Things like food and rent were a must have, the laser appointments were not…however sometimes I would like to disagree on this. 

Once I worked out what my necessities were I would be able to see the left over money. I was sure there wouldn’t be any left over money. In fact I thought I was going to give my friend a heart attack when she saw and tell me to immediately file for bankruptcy. 

My friend had even told me I needed to start saving some money. HA Savings! What was that? It was as if she was speaking mandarin to me. I didn’t even have faith that there was enough to cover the current bills let alone anything left over for savings. 

My following expenses were:

Debt Repayments

Food

Rent

Electricity 

Gas 

Petrol 

Car Insurance

Contents Insurance 

Pet Insurance 

Dog food

Health Insurance 

 

After all this I was left with $150 for the fortnight. I was told by mandarin speaking friend that I would need to save $50 of that and the $100 could be my pocket money. Pocket money was for me to spend on what ever the hell I wanted without feeling guilty. I can not stress how important it is to have pocket money. This is by far the number one reason I was able to keep on track all these years.

I was told to break my bank accounts up. I would have a bills account, a pocket money account and a savings account.

I waited ever so patiently for my pocket money card to arrive in the mail and when it arrived I was so excited to transfer the money over to it. Something that I would have burned through so easy a couple of weeks back I was treating as treasure. 

I recall how my mind started to switch, I was suddenly thinking of what I wanted to buy rather than just buying it. I was more aware and present in all my purchases. My mind was changing!

You have done the crunch! Its now time to list out all your expenses and work out where you can cut things out, are you really using your gym membership? Or need that subscription to an app lost in your phone? This is the time to cull. Culling will significantly assist you with getting more of those dollars working better for you. 

Secondly set up your bank accounts! In the last few months I have moved my majority of banking to ING. There were three main things that stood out to me, the first thing being that there are no ATM fee’s, you mean I can use any ATM and not get charged a ridicule amount of money? Secondly (ok I lie this was the first thing) when you sign up they just give you $75…. For nothing… just out of the goodness of their hearts. All I had to do was transfer a $1000 in there in the first pay (savings, pay, etc) and then voila 75 smackeroonies. This has now been decreased to $25 when you refer someone, so if you use this code EMT823 you can be eligible for the $25. Thirdly ING had the best interest rate on their maxi saver accounts. They were higher than any of the current term deposits being offered and your money wasn’t being tied up for 1-5 years. I still have a bank account with Commonwealth because a. I'm a creature of habit and have been with them since I was 5 and b. all my direct debits are set up to come out of there and that in itself is worth the $5 account keeping fee they insist charging each month!