I don’t know about you but my belt is getting tighter and tighter these days. It just doesn’t hold as much as it used to. Stretching it is putting a lot of strain on me. To say this is a challenge is an understatement!
How many of you reading this think I am talking about my weight issues?
Sorry to disappoint you.
I’m talking about my budget – the money I am paid, the money I have to pay out, and the money which is left over, each and every fortnight.
Budget – it’s such an ugly word. Upon hearing it, people cringe like they’ve just eaten something disgusting. Some people feel like making a budget is some sort of punishment for someone who has been, or is, reckless with money. To say “I’m on a budget” is like saying “I’m on a diet” – both give the impression that it is a short-term commitment or solution to something which has been a long-term issue. But what is truly being sought is a more permanent way of rectifying it.
Personally, I hate the monotonous merry-go-round of life. My life at the moment is – wake up, go to work, come home, eat, sleep, repeat until a bill needs paying, pay the bill, continue……I know a lot of people who live from pay cheque to pay cheque with no money for the bills put away. When their bills come in, they have no money put aside for them so they have to pay it from their next pay. It is as vicious cycle to be on because it is very difficult to break.
When I was living in a small tiny unit in 2002, I was doing just that. After my rent and car loan, I had $70.00 for the fortnight to buy food, put petrol in my car and pay bills. If I had to pay a bill, which was at least once a month, it left me virtually nothing to do anything with. This was a cycle I had been in since leaving home in 1996. I hated it and knew I had to make a change somehow.
My landlord allowed me to have a small garden and I saved money by growing my own vegetables. Also, I started freezing my fresh vegies so they wouldn’t go to waste as there always seemed to be more than I could eat. Due to the abundance, I was able to help a few others as well. Any fresh vegies I had to buy were also frozen. This act alone saved me lots of money because I didn’t have to buy vegies every pay.
When it came to putting money aside for my bills, this was the hardest part. It involved putting myself in a harder position short term in order to put me in better financial standing in the long term. My plan was simple and not easy to get off the ground, but it worked. And it is what I have used ever since, as well as instilling it into my children so they might have a better start to their financial life than I did at their age (For those who are interested, I outline what I did at the end of the blog).
Recently, I discovered that I haven’t been putting enough away for my bills since October 2016! I nearly had a heart attack! Instead of just needing to increase the set amount put away for bills by $30.00, it was now having to increase by 100%! That meant half of what I thought I had for food and petrol up to this point, needed to go towards the bills. I couldn’t believe it. How was I going to buy food and petrol now? I felt sick.
I realised that the way I had been purchasing food up until now wasn’t going to work very well with the tiny amount I was left to play with. My brain was hard at work thinking of a solution to this dilemma when one of my sisters came to mind. She and her hubby have been doing a meal plan thing for a few years now. They plan what they will have for dinner each night in the fortnight and shop accordingly. A few years ago, I gave this a go because I thought it would save time in cooking each night (I wasn’t thinking I could save a few dollars). It never worked though because I never felt like eating what I had planned for that day.
Then I had a light bulb moment – what if I make a list of meals I would like to eat and then just choose one each night?
So, I wrote down ten meals and numbered them. Going through each meal, I worked out what ingredients I didn’t have and made a list. I added other items needed in the grocery shop as well. The trick with any list, however, is to stick to the list. It is with pride that I can say that I actually did stick to my list for a change, and spent $106.00 for the entire shop! Meat included! I think that is a new record for me.
Well, that was enough to get me totally addicted to this method. Whatever meal which wasn’t used in that fortnight (for whatever reason), was carried over to the next fortnight. I have been so excited by the success of my first shop that I have dusted off old recipe books and am truly looking forward to cooking for the first time in over 10 years.
My food shopping costs have reduced from roughly $280.00 per fortnight to roughly $150.00 per fortnight in just 2 months. The meals I am cooking are healthier, they’re tastier, and there is a variety to choose from.
Gone are the days of “what can we have for dinner?”. It’s now “when is dinner going to be ready?”
For those curious about what I did, please read on…..
Following are the steps I took in 2002 to help myself get out of the rut of living pay cheque to pay cheque. Please note that I did feel further financial hardship for a short period at the beginning of implementing this but once I had it going, it was, and is the easiest budget to live by:
1. I wrote down all the services my money had to pay for – rent, electricity, gas, phone, water, internet, food, petrol, insurance, registration, etc.
2. I wrote next to each one how often I had to pay them – monthly, fortnightly, three monthly, yearly, etc.
3. I wrote next to each one what the cost was for that period. I didn’t add all the electricity bills (for example) together for a year and then divide it by 12, as I don’t believe that is a good way of saving correctly for that service. I found my most expensive bill and used that figure for the calculation.
4. I divided the cost of each period for each service by the number of weeks in that period – eg if it was a monthly phone bill, then there is 4 weeks to a month, and so the cost was divided by 4 to get the weekly cost for the phone: $40.00 per month phone plan / 4 weeks = $10.00 per week.
5. I added all the calculated weekly amounts together – for example $200.00 per week total.
6. Next, I calculated all my incoming amounts together to get my overall after-tax total. Unlike the Tax Office and other Government Agencies, I only can go by what I actually get in the hand in order to pay my bills – government benefit, employment, child support, etc all added together.
7. I took out of this after-tax amount all the weekly paid services, eg rent. This gave the final tally for what the bills were going to come out of – eg $800.00 per week, less $400.00 per week rent = $400.00 per fortnight for all other bills.
8. Now take the amount at 5 ($200.00 per week) and deduct it from 7 ($400.00 per week) – the amount remaining (in this case $200.00 per week) is the amount which you are able to use for whatever purpose you desire. No matter what the tally is, take heart – all your bills are being looked after and paid. There will be no wondering where the money is going to come from when you get them all at once because you have already planned for it.
If you would like to know more or have questions, please don’t hesitate to contact me at firstname.lastname@example.org