Monday, 18 January 2016

Getting Your Budget In Order For A New Year

Starting the new year with your budget in place can help you achieve so much more.  January is a little quieter in my home so I try to make the most of it and plan for the year ahead.

A great place to start is to review last year's budget.  Here are some questions I ask myself when looking over the family budget -

*  Did we over spend in any areas ?

*  Did we waste money on unnecessary purchases ?

*  Did we buy too much of something ?

*  Can we cut back in some ( or all ) areas of our budget ?

*  Do we need to increase some areas of the budget ?

*  What are our goals for the coming year ?

*  Did we reach our savings goal for the items we wanted / needed ?  If not,  how soon can we save for it ?

Asking these questions gives me a chance to review and adjust the budget where needed.  Budgets should not be set in stone.  They need to be flexable to accomodate the needs of the family ( within reason ).  Take some time over the next couple of weeks to set up your yearly budget..  Remember to include all categories to reflect your spending habits.

When it comes to household bills,  it's always good to increase the amount put aside each week / fortnight / month.  Many utility providers increase their charges in the new year. To keep on top of thses increases,  putting an extra 10% aside is a great place to start.  Maybe this is a great time to set up direct debits for each category.

The new year is the perfect time to review your present / gift giving budget.  Things change through the year.  Friends and family come and go,  extra special occasions come up that require a bigger present.  Maybe you would like to give to certain charities.  Building this into your present budget ensures that you have the money available to bless others.

I write all the occasions to buy for in an exercise book.  One page is for birthdays,  anniversaries,  father's and mother's days etc etc. They are all written in order of the date during the year. The page opposite is for the Christmas presents I need to buy. When I review the present / gift budget,  I look over the presents I gave the previous year. By doing this,  I'm reminded of the presents that were well received and the bargains I found.  It's also a good way to avoid buying the same thing year in year out for the same person.

Just recently I went through all my stored up presents.  Everything was placed in order of giving on the present shelf.  Post- it notes were put on each present with the receiver's name,  occasion and year.  Because I buy a couple of years in advance,  I need to record the date to be given.   Once I've gone through the presents and recorded everything in my exercise book,  I write out a list of items I still need to buy.  This list goes into my handbag,  ready to snap up those fabulous bargains.

A new year could mean a new food budget.  If you were spending too much money on rubbish food,  a new budget could be in order.  Taking the time to review your eating habits could set you up for a healthier year.  Remember,  a budget is not set in stone so if you need to make adjustments,  now is the time to do it.

If you have a savings goal in mind,  how will you reach that goal ?  Do you need to set up direct debits into an online bank account ?  Working out the weekly,  fortnightly or monthly amount then setting up the direct debit will ensure you reach your goal.  We all want financial success so a little planning goes a long way.

Do you have an emergency account ?  Do you have the money set aside to replace the washing machine,  fridge,  freezer, car tyres,  heating and cooling ?  You know these things don't last forever so saving for them needs to be a continual part of  your budget.  Work out how much it costs to replace the items.   Then work out how much you need to save for them in 1,  2,  5 or 10 years time. 

Do you have a savings plan to replace your car / s ?  Buying a car can be the second biggest expense other than buying a home.    Car savings also needs to be a continual part of the family budget.  That's how Darren and I have been able to buy our cars without ever having a car loan or paying interest.

Now is the time to gather your family around and plan your year.  Plan your goals,  plan where you are heading and plan for financial security.  An hour or two spent in planning could save you months of stressing out about money.




How do you plan for the year ?

14 comments:

  1. Hello Wendy, thank you for another great post , I have been revising my budget and there are some areas I can improve on. I find that if I have a goal to save towards such as a holiday or an item I need or sometimes something I want ,it motivates me. My grocery budget is first on my list to tackle this year and I have made steps to address this issue. I have a book for gifts too and have many gifts put away and I also am making gifts too. This helps cut down on gift spending as well as having a nice gift to give. My bills are all in credit thanks to paying ahead and I now have an emergency fund too.
    Thank you again Wendy. Love Barb.

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  2. I love this post Wendy. I'm always surprised at what new savings can be made, just when you thought you'd trimmed the budget in every possible way. For me, over a decade, I've gone from spending up to $5000 a year on gifts, to being lucky to spend $500. I had no idea I was spending that much until I sat down and worked it out. It was an eye opener. Over the last ten years, I've taught myself new skills, made many gifts, learned to plan ahead, and be more organised, and it's saved me thousands. I love your advice. Absolutely spot one. Mimi xxx

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  3. Hi Wendy,

    Great post to start off the year. I love talking about this subject and doing this, it gets me so excited.

    When we get our budget in order, I find I overspend in areas like House and garden maintenance as this varies from year to year. When DH goes to buy something that is needed to fix something in the house, eg: recently we had a broken window and DH felt he had to buy an extra gadget to help with the installation of the glass. Or when we stained our French doors recently, he had to buy a gadget so the stain wouldn't run on the glass (when masking tape would have done the trick). All unnecessary purchases costing extra dollars. Maybe I need to give him a budget for the jobs so he keeps within that limit.

    I also go back over the credit card statements to see all unnecessary spending. This year we have cut out Swimming lessons and tutoring, saving there. On the plus side, the solar panels have cut our Electricity bill to NIL for all of last year and as we can flip over the credits to the gas bill, we only had a total gas bill for the year of $180.00. I also have to adjust for the increase cost in Insurances (esp. as we have a newer car now), School fees (DS2 started secondary this year and more $$$), health Insurance and petrol (DH's car usages more than previous car).

    Goals: I always have some Goal in my head that we are saving for ie: saving to update our bathrooms, but I put it all in our saving account and then it seems to take for ever and get used for other things. Maybe I need, as you say, some separate accounts.

    As for the present/ gift budget, I did this last year and this was a great success. I need to write this in my new exercise book (thanks Wendy, heee)
    Last year we did the $300.00 a month food challenge all year. This was a great saving for us, although as I have this under control, I need to work on the slush fund as the shopping seemed to use most of this.

    I need to set up goals this year to be more specific. My emergency account is going along fine as I deposit $100.00 every fortnight into it. I have just over $2000.00 in it as I only started this last year. It may not be enough at the moment for several things if they break down, but it will help and we don't notice the money coming out of the pay. I will do a break down of how much it would cost for those items to keep on track.

    As for the saving plan to replace a car, we recently replaced DH's car and are still paying some of this off. (He seems to think the redraw facility is his own savings account). I HATE it with a passion and want to close it but as we cannot agree on this (we usually agree on pretty much everything), I need to show him that if we have our savings in our bank account, that there's no need for this facility. I will be needing a newer car in the next 2-3 years as my car is 12 years old this year, but as we bought it new, and DH is a mechanic, it's in great mechanical order. I will need to set up an account for this also.

    Another area where I fall down in is where I use money that I have in my purse for something else to buy ie: Whilst food shopping , I might see a top for my boys and use the shopping money as I don't have my clothing allowance money with me and I sometimes forget to pay this back. I have to get on top of this this year.

    I often use a monthly spending plan sheet and each month update this. I'm very computer challenged, so I write all our expenses down in a book, each column for each month and what needs to be paid, so I can see at a glance whats coming in next month.

    Sorry for this post being so long,
    Blessings to all for this challenge, xxx
    Maureen

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  4. Wendy, our budget is set for the new year and plans put in motion for what we hope to accomplish. Having a plan that directs us in the direction we want to go makes getting there so much easier!

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  5. Hi Wendy. Ive just been made permanent at work today so now i can really work the budget and see where we are. Its been hard to do that with casual work so im really happy now :) We'll be changing quiet a few things over the next couple of weeks so hopefully i'll be all set properly soon. Thanks for this post, its great to read and the other comments are really helpful to xoxo

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  6. Dear Wendy,
    I think there would be so many people that have no idea how much they spend on any area but just wonder what ever happened?! I know lots of people like that. I have improved a lot. We have aimed to build up our emergency fund and we also budget for a small holiday similar to the one you had not long ago. We love that! I think it is a really good thing to do too.
    I have cut down greatly on gifts especially the last two years when I have made most of them.
    Utilities keep going up, that is a hard one. Just now we have really hot weather and the air conditioner on! yikes. Electricity is very expensive here. So we have to cut in other areas to keep up.
    I totally agree we must have a regular review of the budget. Many things change.
    Excellent post. With thanks, Annabel.xxx

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  7. Hi Wendy, I'll be doing over our budget for the new year soon (when little one gives me a moment!). I think the area we could save on is gift giving, this year I have already started buying gifts as they coming on special throughout the year and have a maximum spend on each person which I'm not allowed to go over, so far it's working really well. I'll set up an excel spreadsheet which will help me see where money is going. We are pretty good with our water and electricity consumption as we don't use much at all.
    This year we just want to save. We also want to start up a bank account for our little one and just put little bits of money aside from time to time. So I'll be planning on how much we are spending each month and see how much we have left over, after that we see what areas we can try and improve on and maximise our savings.

    Amy

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  8. Hi Wendy, Thank you for taking time to post about budgeting, saving, and running an efficient home etc, I am learning so much. Could you please do a post on how to set out a price book and how it works? Do you find it helpful to record all your grocery purchases? I am really wanting to learn how to be more efficient and accountable in my spending. I find money "leaks" occur with the small seemingly insignificant purchases and not the more expensive items!
    Many thanks,

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    1. I'll make a note of it and hope to do a price book post soon.

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  9. This is an excellent and much needed post for many. Getting your budget in order is very important!

    Mine will stay the same as it is working well for us, but I am always looking for ideas to cut back even more. Putting everything down on paper is the only way to keep track of things in any budget :)

    One thing we do is have a "BILLS" account set up solely for paying bills. I have tallied up the figures by working out what it costs per fortnight and I transfer this amount into the account. When a bill arrives the money is already there and I pay them straight away.

    xTania

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  10. Goodness me Jennywren!! I was only wondering this morning when I was topping up food for salads what a price book was and how to use one. I have read many times about them and with more free time on my hands this year, I determined to save, save and save.
    Thanks Wendy for the post. For Christmas, Hubby bought me a chest freezer. It was chock a block over the Christmas period and has slowly declined. A freezer top up shop will be happening soon!! Everytime I open it, I say a silent THANK YOU to YOU!!!!
    I have been writing all our spending down. I have discovered that even though we allow ourselves a fortnight budget for groceries, Hubby tends to go to the supermarket for things I may have forgotten and comes home with extra stuff. Alot is stuff we can go without for our health such as soft drink, chips etc I think my only way around this is to NOT forget anything! Haha.
    Take care,
    Vicky

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  11. Hi Wendy. Thank you so much for your blogs. I came across your blogs last year after seeing you on A Current Affair. Your blogs have changed my life.
    Amanda

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    1. Thankyou so much for your kind words Amanda. Please feel free to comment and ask questions any time.

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  12. Hi, Wendy! I'm sharing lots of budget helps and articles right now, so I'll share this article on Facebook tomorrow morning (1/17/17 in the USA). Thank you!
    Blessings, Leigh

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