I'm Dreaming Of A...Budget

It's beginning to look a lot like Christmas.


Where has the time gone.  It feels like yesterday was my daughter's 3rd birthday (July) and here I am again perusing the influx of catalogues and emails for little girls toys.


So how did you fare after last year's Silly Season? 


It is alarming just how many temptations are out there to totally derail us;  An incredible amount of retail sales and online bargains plus the usual timely pre-approved credit card limit increases.


What is your strategy for not breaking the bank over Christmas?  Or do you even have one?


Over the years talking to clients about cashflow and budgets the biggest gripe is that it's too hard and too boring.  The key here is to make your budget FUN.  I know, words only to be uttered by accountant, but actually it's true;  a budget can be fun and thus more chance of being successful.  Let me explain.


There is a tendency for people to cut back on all luxuries when they need to save or make their money go further.  What makes a budget like this fail is that the cutbacks are completely unachievable or unrealistic in the realms of real life.  Let's face it, life is here to be enjoyed and unfortunately in a material world, part of that enjoyment does come at a monetary cost.  It's how you manage that with your happiness and enjoyment that makes a budget a success.  


What you need to do is find a balance between saving and fun and also in part, change your thinking about what constitutes fun, ie something that is free compared with something that costs money.


How does one go about creating a fun budget then?


The first time you prepare a budget you should write down everything you spend your money on each month/week/fortnight (if you are new to a budget and really need some guidance choose a shorter period like weekly or fortnightly).


Then critically look at what you are spending each period.  


There are certain items that  are "fixed" like mortgage/rent, insurances, rate  and taxes etc.   Whilst some of these you can't change, there are always deals to be had on insurance to internet and mobile telephone plans to electricity providers.  Something as simple as changing a provider could save you a few hundred a year.


Then there are the "variables" (the fun items) like entertainment, clothes and to a lesser extent groceries.  


Once you've critically looked at the fixed and the variables, critically look at yourself - who you are and what you need.    


If you are a social person cutting out entertainment altogether will mean your budget is doomed before it's even implemented.  The amount and type of entertainment is what needs tweaking.  Are there things you could do that are free?   If part of your social enjoyment is sharing time with friends or family then why not do that at a park or over a board game.  


If you are a person that won't give up personal grooming then think about ways you can save money on these types of expenses.  Buying deals on the internet, buying a cheaper brand, buying vintage or barely worn clothes off EBay.


Revisit your budget on a regular basis.  What is working and what isn't.  Where are you struggling to keep within the limits and why.


Need more help?  Contact me at sarah@willoughbys.com.au