How are you doing? We hope you have a Fabulously Frugal February. At our place the bills are coming in thick and fast. Luckily, this month is BUDGET TIME. Starting with a short tale about how a medical disaster made me a better budgeter, then we will look at ways to budget with advice, tips and my favourite budgeting thread in the forum. Followed by updates from last month's "Use it Up" challenge.
Enough from me. I hope you have a great month and 'Let's get budgeting!'.
All the best,
PS. *Fiona looks embarrassed*
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In 1997 my Mr was out in the garden pruning some Date Palms. A few days later there was a thorn in his knee. When he went to the Doctor to get it removed we found it out it wasn't a thorn, it was a piece of bone. His kneecap had splintered. The Dr told him he had to quit his job and STOP WORKING IMMEDIATELY.
We went from 2 incomes down to just my casual income. I was scared and had to find a way to make sure I was earning enough money to cover our bills.
I did it by making a 365 day budget. I worked out our bills for the year and divided them by 365 days. This told me how much money I needed to earn every day to be safe.
After I'd worked each day, I added up my hours, worked out my tax and calculated my pay. I put aside the bill money, then worked out what was left over.
The leftover money was divided into grocery money, petrol money and savings (which were put away for the days I never worked and earnt.) This way we made it through and all our bills were paid on time.
Everyone knows they should have a budget. But, many say it is too difficult and they don't have spare time to create or stick to a budget. While creating a budget does take time, we found the biggest barrier to creating a budget is people simply don't want to do it. They don't want to have to think about their money, they don't want to see their finances in black and white, they want it to all take care of itself. Which is a fair thought. But, this is a recipe for disaster.
Another way of saying the same thing is "not having a budget" is setting yourself up for financial failure. We want to set people up for financial success. So here are three simple steps for creating a budget. The first is desire, the second is skill and the third is enjoying the rewards.
To be a good budgeter, you have to want to be a good budgeter. To help you want to budget ask yourself the question, "What is it you want that a good budget will give you?". Here are some possible answers.
To know how much I can spend each day
To know how much I need to earn each day
To know where I will be ten years from now
To have a holiday
To build a nest egg
To have a financial safety blanket
To always have money for a fridge when I need it
To help me make good decisions
To get out of debt
To know you are going forward
To work out how much you need to earn.
While there are a lot of sites that teach budgeting on YouTube, Facebook and around the net. Here are two of our favourites.
While starting a budget can be hard and some days sticking to it can be tricky, the rewards are fantastic! It is the best way to set yourself up for a life of prosperity.
You can find a lot of the information you will need on your bank statements or credit card statements to start off your budget. You also need to know your income after tax. And don't forget to include any other money you get too.
Your 'fixed expenditure' categories are things that you can't change too much.
Rent and/or your mortgage aren't always quite that negotiable. You can always TRY to negotiate a better interest rate on your mortgage though, as it may assist in growing you some more savings.
Some more fixed expenditure items are things like Council Rates, Body Corporate Fees, Car Registration and Roadside Assist all which simply must be paid in full.
Do make sure though, that if you are entitled to financial assistance for those things, that you do apply for it, or make sure you get any discounts that are available to you.
Then there are 'negotiable items'. Things where there is room for negotiation with your providers, if you care to make a phone call. You will get used to making those calls and most large companies have people who will talk to you and who can help you to get a better deal.
Don't get caught paying Lazy Tax. Lazy Tax is paying more money than you had to because you didn't call to ask for a discount or you receive a fee for neglecting to pay a bill on time. Things you should always ring and ask for discounts on are car, house and contents insurance, Foxtel and so on. Do look around for the best phone providers and best internet deals too.
Electricity and gas providers often offer a bit of wriggle room. I have a 21% discount on both my Usage and Supply charges, with my electricity company and it truly makes a difference to lower our quarterly power bills. As does the solar power and solar hot water that we have, at our place.
Always add a category for 'Discretionary Spending' or 'Sanity Money'. This covers most of the things we buy or choose to pay for, to enhance our lives. It's an amount of money, your choice, to spend as you wish no questions asked. Can be a tiny amount to whatever your budget allows. Often when people are saving up for something special or paying debt down, it can save your sanity.
The personal spending choices can include health, schooling, gym memberships, sports, craft, pets and other more personal, special interest choices. The things which make us happier people for doing them. The things which make us who we are!
Food and groceries are a big expenditure for most people too. Hopefully we can encourage and inspire you to reduce that, through discussion and resources via the Simple Savings forum and in the Simple Savers facebook group. There are many hints, tips and discussions about ideas on how our members do that.
Of course with any good budget you need to know what your debts are, so you can pay them off or you can try to debt bust them and get rid of those altogether.
Here is a great explanation about debt reduction from super saver Katie from over on the forum -
"You need to list your debts with their interest rates. There are 2 methods to pay off your debt.
The first is the snowball method where you list the debt from the smallest to the highest. You pay the minimum on all debt and any extra funds go to the smallest debt until you pay it off. Then you work on attacking the next smallest debt. Psychologically this one works because you see progress quickly.
The second method is the avalanche method. This is where you list your debts in order of interest rates and attack the highest interest rate debt first. You use the same method as the snowball method where you pay the minimums on all debt, but with the avalanche method all extra funds are thrown at the debt with the highest interest rate until it is gone. The avalanche method saves you money in the long run as you are paying the highest interest rates first, but it will appear to be slower because you aren't knocking out those small debts quickly."
Eliminating debt will give you some surplus funds. Surplus funds give you more freedom. They are the funds which really give you a sense of financial peace.
Surplus funds are my absolute favourite category. It is the reason that we squish down all of our other costs to make our budget as low as we can. You can read about my budget here on the Going Lower thread, in the Simple Savings Forum if you are a member. They are in the thread link below, in the second and third posts -
If you would like to get your expense down, check out the thread "Living on $20,000 and under." It is full of inspiring people, great tips and delicious recipes. It is worth reading.
We are totally aware that not everyone can live on so little, but it is very encouraging that people can and do.
Here is a link to the thread: (You will have to be logged into the Vault to read it.)
You can also read about how the 2021 January USE IT UP Calendar Challenge went over here in the forum
The challenge was to use up what members had in their pantry, fridge and freezers so no food was wasted and nor would it get past it's best and end up in the bin. We used this challenge to also 'check' the goods that were stockpiled. Some stockpiled goods have likely been held for 12 months or so by now pre COVID, so they do deserve to be rotated and checked.
The most popular post in our Facebook group this month was Sue Byrne trick for creating an affordable raised food bowl for her dog.
To comment on the post or shares suggestions go to:-
A great way to keep your budget under control is to cook your own food. Here is one of Sandra's tasty, affordable delicious, budget busting recipes for you to try.
2 cups of self raising flour
¾ cup firmly packed brown sugar
½ cup of white chocolate bits/chopped chocolate
1 lightly beaten, large egg
¾ cup of buttermilk (see notes)
½ cup vegetable oil
1 cup fresh or frozen blueberries.
Preheat the oven to 180° for 10 minutes.
Grease muffin trays or line them with paper cases.
Sift flour into a large bowl.
Add brown sugar and chocolate to the bowl.
Mix dry ingredients together.
Gently stir in egg, buttermilk and vegetable oil.
Add blueberries. Don't overmix.
Spoon mixture into prepared pan.
Bake for 25 - 30 minutes.
Don't overmix your muffins. If you stir the mixture too much you will end up with tough muffins instead of light and fluffy muffins.
if you don't like white chocolate, add 2 tablespoons cocoa to the SR flour (take out 2 tablespoons of SR flour if you do add the cocoa) and use chopped milk chocolate or dark chocolate instead of white chocolate.
you can make buttermilk by adding a good squeeze of lemon juice OR vinegar to ¾ cup of milk. Stir and let it sit for a few minutes. This saves you from specifically buying Buttermilk.
If you are lactose intolerant, you can use your Lactose Free milk
to have even sized muffins use an ice cream scoop to fill the muffin cases/holes
buy Australian Blueberries during January, when they are cheap and plentiful and freeze them to use in other things.
I like a big generous muffin so I only filled 9 muffin holes
Here are some Blueberry and Chocolate Muffins fresh out of the oven.
Thank you for joining us for another newsletter.
Have a fabulously frugal, Budget Time February.