Let me tell you about the way I used to budget. In short, I didn't budget at all. I never had the foggiest idea what was in my bank account. I suppose you could say I lived in denial. When the bank statements came, I threw them away without looking at them, because I didn't want to be reminded of all the money I had spent and where it had gone. Much of what I spent was on utter rubbish. If I wanted something, I bought it - simple as that. Both of us would write cheques willy-nilly without even thinking. Although for years we earned good money, we never seemed to have any. We were permanently in overdraft, and because we never had cash, we were always sticking things on hire purchase agreements. I never, ever carried cash, I wrote cheques out for everything - it was better for me to do that than use Eftpos and risk being declined. Living in a small town, I didn't need to carry cash - we had accounts everywhere and it was so easy to run up huge bills by putting everything on the tab. We were living in farm accommodation, so we had no rent to pay; the house came with the job. For seven years our meat was free, our petrol (for both our cars) was free and whatever money we had, we spent however we liked. We had a good lifestyle and never once thought of saving - we didn't need to, as we thought we were secure. Looking back it makes me cringe - we should have been rolling in it and I had no idea how lucky we were.
But we weren't secure. Our job suddenly came to an end, meaning not only had we lost both our sources of income, but the home we thought would always be ours. We both found new jobs in the nick of time, but our income was down to less than half what we were used to earning. We had to sell the only assets we had - the livestock we had been building up for the last ten years - to enable us to put a deposit on a house. No matter how much we told ourselves that we had to be careful now we had a mortgage, or tighten our belts, we still didn't learn. We had become accustomed to our previous lifestyle and found it very hard to give up. Our first year as homeowners was once again spent in blissful ignorance. We were living exactly the same as before, but on far less money, and now with a mortgage in tow.
So, what changed everything? The copy of That's Life magazine I bought in May 2004, where I read about a money saving website called Simple Savings. Instantly it appealed to me, because it was talking about ways to save money on everyday items. That was what I needed - not like all the budgeting websites I had looked at in the past, full of financial jargon that went way over my head and didn't hold my interest. I wanted to learn more, and from that moment, I was hooked. I could see that it was possible to save on all kinds of things and people who had been in worse situations than me had managed to dig themselves out.
Slowly, I began to learn how to budget. I began to pride myself on saving money and none of us seemed to suffer for it - in fact, quite the contrary. I drew up a spreadsheet on my computer and started to take stock of our monthly income and outgoings. I made it up as I went along and although it took me a few months to really get the hang of it, for the first time in years, I knew exactly how much money we had and how much we needed to have. I became more and more meticulous with my spreadsheet and soon was balancing our finances exactly, but to be honest, I found it hard work and high maintenance. Sometimes I would forget to update it and then have to enter in screeds of transactions from the last couple of weeks, but I didn't know of a better way.
So I couldn't wait to try out the Simple Savings Bill Payment system when it came out a few weeks ago! I'll be honest, I was dubious about how keeping all these bits of paper would work better than my high-tech spreadsheet, but I was still keen to give it a go out of curiosity and I had nothing to lose, right? I gathered all the things I needed together (I didn't need to buy a thing - by the way, if you don't have cardboard dividers you can always make them out of large empty cereal boxes, they work fine!) and I'm not joking, I have never had so much fun paying my bills! It took such little time and effort to get started and it really made me look closer at the bills I was paying. I was able to easily scrutinize my Monthly Bill Summary sheet to see what all the bills were for and where I could improve or eliminate them next time (for example, I have now closed all those convenient accounts I had in town and only pay cash). For the first time ever, I know exactly how much money comes out of my account each week of each month, by consulting my Pay Day Planner. I can see that all my bills are paid by Week 3, so anything left at Week 4 can go into savings! I pay my bills as soon as I receive them now, because I know how much money I need and how much will be in my account. I still throw my bank statements away, but these days it's because I already know what's in them - down to the last cent!
I'm still far from perfect when money is concerned. I still buy too many soft drinks when I'm out, too many sweets for the kids and too many things I don't need sometimes. I still berate myself over the odd impulse buy, but the savings I have made by re-educating myself through Simple Savings far outweigh my odd little splurges, and I am always trying to do better. I have set up the Bill Payment System for the next 12 months and am looking forward to seeing how I can whittle it down each month.
When I think of all the times in the past I had to grovel to the bank, month after month and of course it was always a big deal, like trying to get blood out of the proverbial stone. Since I began my savings blog in May, we have not had to contact them once. Imagine how Noel and I laughed when a letter came from the bank last week, offering us a pre-approved $20,000 loan! How ironic - whoever said Ã¯Â¿Â½money talks' was right!