Wednesday, February 18, 2009

How to budget

Are you stressed? Do you often wonder how to stretch each pay to make ends meet? I know how you feel. Let me help you cope with day to day living and free up your finances.

In many households, budget is a dirty word. It implys restrictions of finances and limitations on shopping. Oh what we'd give to be rich and not need a budget. Let me tell you now, the rich live on a budget. How do you think they became so wealthy and stayed that way? So lets get started on helping you become debt free!

1. Make a list of all your expenses eg rent/mortgage, loans, credit card, electricity, telephone/internet, school fees, uniforms, insurances, vehicle registration, extra school expenses - camps, bus fares, groceries,fuel, haircuts, medical, bank fees etc.

2. Make 6 columns beside the list. Mark them Week, fortnight, monthly, quarter, half year, year. Put in the amounts you pay under the appropriate column. eg electricity $300 each quarter, Mortgage pay $700 each month. Some bills vary, like electricity & telephone, put them in separately.

3. Next, total each bill for 12 months. eg Weekly amounts x 52, Fortnightly x 26, Monthly x 12, quarterly x 4, etc. Put total per bill in Year column.

4. Now divide the Yearly totals by the number of paydays you receive each year. eg Fortnightly = 26. If you receive income from different sources on a regular basis, use your main income payday.

5. Add the new amounts together. This is the amount to be deducted each payday BEFORE spending. You can either transfer into a separate account, withdraw total and place in separate marked envelopes or see if your bank offers a Bill Pay account. There are pros and cons for all so chose the best system for you.

If you feel that you will dip into your budget, then perhaps a bill pay account is best. Personally I like Bill Pay as the bank transfers the budgeted money automatically from my account into my Bill pay account. Everytime I receive a bill,the bank will pay it, whether I have enough money in that account or not. It all works out over the year and is totally stress free.

6. Are your expenses more than your income? Obviously you need to cut costs or find extra income. I will go into this more on a different post.

7. Is your income more than your expenses? Well Done!
The next step is to put 10% of your income away for a rainy day (retirement). This is never to be touched.

8. Still have money left over? Awesome. Then put 20% of your income away in another account. This is your emergency fund. Unexpected incidents happen in life and we are not always prepared. Now you are.

9. Any income left over is yours for luxury items, extra savings, whatever you want. You can even pay off your loans/credit cards earlier and save on interest by paying extra each week/month.

Monday, February 2, 2009

Managing Time

Its week 2 of a new year at school. We are starting to settle into the new and more rigid daily routine.

For my daughter beginning Year 8, its learning the routine of lessons in different classrooms rather than 1 classroom all day. AND getting up early to catch the bus. Thats a toughie at times.

For my son and myself, its being self-disiplined and motivated to start school at a reasonable time each day as he is being home schooled through Distance Education. Yes I'm his tutor. We have good days and bad. I am sure there are plenty of others out there in similar situations. I really would love to hear how you manage. Speaking for myself, I know the housework and my home business have been getting a back seat in the last week which is not healthy. As today was a bad day, I started re-doing my time management schedule. School holidays had thrown that out of wack and now its time to straighten up.

All in all though, I love home schooling my son (Year 9) and would also like to do the same for my other children should they choose. Time management is definately the key to keep the everyday chores up to date and to run my business. Some days I feel like Supermum and others I'm definately not. More not! Hopefully after today this will change.

Woo Hoo!! So far so good! The housework is up to date, the business is back on track and we are still keeping up with the school schedule. Being able to manage my time more efficiently even allows time to relax and just enjoy life.

I'll let you in on a secret to easy Time Management.

Colour Code your day.

List everything you do each day eg bathe, breakfast, go to work, business activities, cook meals, housework, kids activities, family appointments etc.

Now allocate a colour per group of activities. eg green for bathing, breakfast, school run, going to and from work, kids bedtime. red for kids sporting/extra curiccular activities, blue for family appointments, you get the drift, now do the same for your business activities.

Your diary or calender will look like a rainbow making it easy to see whats on at a glance.

You can even fit in those little "things to do" that you've put aside for 'when you get time'.

Let me know how you go.