With the new year coming in wanted to know how fellow ozbargainers budget money? or do you just look at your bank account and buy things ?
The reason I ask - I have tried multiple styles - softwares , apps, different bank accounts allocated to important things, spreadsheets , even used different envelopes to label important categories but all gave half baked results.
experienced budgeting gurus please advise?
I don't. I buy things I want and need, I save when I have nothing I want to spend on. Unless you're genuinely struggling to make ends meet (e.g. you're at the start of a long mortgage) or you're specifically saving for something like a new house, I don't see the point in trying to budget or be too restrictive with your spending.
What's the point in being rich? People hate you anyway. Might as well make the most of what you have right now and spend your hard-earned money on things that are important and meaningful to do. So many people spend their entire lives working overtime and saving up money to buy investments which make them heaps of money when they're 50. At that point, they realise that they only have 30 or so years of their life left.
I don't view OzBargain as a way of saving money, I view it as a way of getting more toys for the amount of money I have.
Check our YNAB (You need a budget).
I have an old version that I use and am actually going to do a full refresh of my budget this week. It's kind of like the envelope concept but is based around building a buffer so you aren't living from pay to pay.
The hardest part for most people is admitting what they actually spend. If you hate cash and do everything on card, export your transactions for the last 3 months into Excel and categorise them as "Fixed" and "Discretionary". Review your fixed and ask yourself if you can reduce any of those down (e.g. go to the supermarket once a week for a bigger shop to buy to a meal plan instead of 2-3 smaller shops if you're near a supermarket that ends up driving more impulse purchases. Then review your discretionary list. It's a horrible process when you realise how much "stuff" you buy that you just don't realise.
If you're a cash person, carry a pocket notepad or use your phone and record everything you purchase for 2 weeks - everything - gum, public transport, coffee, lunch etc and do a similar exercise.
Sounds good thx
+1 for YNAB. Tried a heap of other solutions and this seemed to fit well.. Am now at a point where I don't need it anymore as the (buffer) savings is built up enough to take care of next months bills without stressing..
And that's the main point. Initially I spent a long time setting up budgets etc. and the missus noticed I was stressing out over little things too much!
So like @paulsterio said - have enough to pay for the necessities (rent/food/fuel/utilities) and spend or save the rest go out and enjoy life!
I'm in the process of selling investment properties to pay off all debt, leave work, buy a caravan and tour around Oz in my 30's! No point waiting to retirement when I might not be able to walk out the front door.. People spend their whole lives working their arses off, saving every penny and then for what?! Yes you need some solid SuperAnnuation in place (SMSF in my case) to keep things ticking over but you also need to enjoy TODAY, as you never know when your number comes up.
Very good plan and awesome that you are achieving that at your age. Timing is about right with property coming off the boil and a recession looming. Good to be able to work along the way if possible, keep your hand in and at least earn the minimum before tax kicks in, though by sound of it, you may already be getting that from investments.
I completely agree with this. Also, never sell yourself short. So many people don't value their time and fritter their time away doing things that aren't important. Now, I don't mean work, but I mean doing things they don't particularly enjoy or need to do.
The most important thing in life is your family and the people you love and care about. The second most important thing in life is living. Do what you need to do to give yourself and those you love a comfortable life, then use the rest to enjoy it.
I'm still young, but I wish I could offer this advice to all these parents who work too hard and never spend time with their kids - I grew up in a pretty average family, not poor, not wealthy. I went to public schools my entire life, fine dining consisted of McDonalds and grand holidays meant driving up to Sydney from Melbourne, where I'm based.
Whilst this might not seem like "the life" to many people, looking back, I appreciate the fact that my parents didn't work late hours and the fact that they were there for me as I grew up. What I value is the fact that I was able to spend quality time with them and that time taught me a lot about life and about growing up.
Sure, my parents could have worked long hours and overtime and throughout my school holidays to go on massive overseas vacations, to buy me an expensive car when I turned 21 or to buy me a house and "set me up for life", but I would never exchange the time I spent with them for those things. I can go on vacations later, I can buy myself a car (in fact I did after saving for two years when I turned 19) and I can certainly buy myself a house later on in life, but I cannot buy the time that I spent with my family. Always keep that in mind :)
+800 for YNAB - which is about the dollar amount per month it saved us. Great app for the phone and desktop has turned budgeting from a nightmare into a breeze. I learnt heaps from their 10 day email course. It broke down some weird mindsets I'd built up over the years.
I used to budget with complicated spreadsheets plus dedicated accounts and it would go ok for six to nine months before falling over in a screaming heap. I've been YNABing for 18 months now and couldn't be happier.
You don't need a budget. Spend less or earn more or both. Simple. Or details:
Sell your phone and buy a cheap $30 android or dumbphone purely for calls and texts on the cheapest prepaid plan. Don't use data and/or have your provider disable it. I spend $10 every six months on my main phone and basically don't really use it.
Sell your car unless you need it and use public transport
Scrap all eating out and coffees period and make your own. Allow only limited meals out a month if you really want to.
Cut back all other discretionary spending, especially clothes. Kmart is there for a reason. Target is usually pricier.
Scrap the health insurance and put aside as much as possible into your own health fund
Stick to specials at Colesworth
Find a job that pays cash off Gumtree
I guarantee someone will moan that you are really not living after reading the above … .
Find a job that pays cash off Gumtree
Wish I could
…and one day you will be the richest man…in the cemetery!
When I was carefully saving, I took out my weekly budget in cash. It was much easier to track my spending when I could actually see what I had left in my purse. With credit or debit cards, the incidental spending added up very quickly. If I spent what was in my wallet, I would have to either eat what was in the pantry or visit the parents for dinner.
There are medical conditions that can cause excessive spending..
I budget, earn good money, and then for no apparent reason id spend excessively on something.
I spent so much money.. I have so much stuff.. Think hoarders.. but cleaner.
Talk to a doctor if you feel its outside of your control.
Not saying this is the reason, but no-one told me it was a possibility, and I wish someone did.
Now I take a pill, I don't bankrupt myself. I <3 Science.
Good Luck ^_^
As others have said - work out what you spend your money on and divide it into compulsory, preferred and frivolous. Whenever you buy something think about how you will use it and whether it is the best thing to go with. I don't agree with cutting out all the "rewards" spending. Sometimes splurging on a coffee will stop you splurging on something much more expensive. If you really want something, and it appears to be a bargain, go sit down and have a coffee and think about whether you will get value for money on it. Once you are out of the store it is easier to think clearly and you can search the web on your phone to see if this is a good price. This is also the reason I would get a phone plan that has data.
While the advice here about living within our means is worth following I think OP just wants to know where the money is going every month. I have tried multiple methods but the best for now is just a spreadsheet with a some (but not too many) set of categories, make entries every night and run a graph on it every month.
I've used
I just want an app where I enter an expense; set a category and date; see a pretty graph at the end of the month and maybe compare with previous months. Anyone know an app that does this? Happy to pay a nominal cost too (under $5).
try TrackMySPEND app, I find it easy to use and does what you want (allows you to enter an expense, specify category and date and even time, and bar graphs on a periodic basis). https://www.moneysmart.gov.au/tools-and-resources/calculator… I believe it's free
Thanks.
I don't have a proper budget but I'm conscious of my spending and what things cost me. I use the TrackMySPEND app to keep track of expenditure, and also review my credit card statements closely. I try to find ways to lower my fixed costs (eg, recently switching my Optus mobile plan with a saving of $10/month, negotiating against rent increase, compare insurance prices etc). I love shopping and buy what I want, but it's almost always a thoroughly researched and well justified decision. I can go out and buy the kindle paperwhite today, but I know I can wait and am happy put up with my iPad mini for reading ebooks for the time being and will pounce when a really good deal comes along, or perhaps reconsider and look at new alternatives.
I saved about $40K last year and aim to do better this year if I can.
Great ideas everyone!
I use YNAB - it makes you "Give every dollar a job" but I tend to place money in buffers and spend from that, and fund my regular categories. They have just released a web based version with some other extra functionality that looks very good. Have a look at their website and do the 34 day trial, make sure you watch all their videos though because there is a sound method behind the software that you might have a slight learning curve with.
I have found the main trick for budgeting is tracking everything… EVERYTHING that you spend. Be brutally honest.
Record it somewhere. If you can't make it accurate, do a close guestimate on what you spent your money on.
This does two things: 1. Makes you very aware of what you spend and 2. Makes you less likely to spend (because you end up not wanting to have to record it later!)
With the above purchasing information, you can then work out where you need to change.
Also - always pay yourself first. Siphon around 10% of your pay and live off the rest.
I once used Gnucash to track all my spending - it's a very powerful, free, open source program. I used this to track my spending over a two year period where I managed to pay down almost $20,000 CC debt.
You might also want to try Pocketbook - https://getpocketbook.com/ - this is a pretty exciting web based (Australian) budgeting solution - it pulls data from your banks (yes I trust them), works out regular expenses, what you want to be saving, and then tells you what money you have left for "fun". It's really simple to use. If you are looking for a real easy solution, try it out!
I like the idea of the 50 30 20 rule.
http://budgeting.about.com/od/financial_rules/a/The-50-30-20…
I pay all utilities (Gas, Water & Electricity) using the EasyWay system $110 pfn from pay. I also transfer $400 pfn to a Qantas Frequent Flyer prepaid Mastercard and use that for shopping etc., then try to avoid dipping into my savings account. I am certainly not a big spender as both these accounts are healthy and my (one real) credit card balance is zero, so I must be doing something right. My phone and Internet bills are taken from the credit card but paid out immediately they occur.
Years ago I set out a spreadsheet on my expenditure. I wasn't strict about budgeting and I had an "excuse" column for those items I really needed or wanted, which legitimized those expenditures to me. Looking over the expenditure helped me to establish a simple budgeting plan. Then I returned home for a time I found that I had too much cash on me, which made me nervous, and I started putting the excess cash In a jar. This became ridiculous as it soon reached a few hundred dollars. I opened 2 new term accounts at the bank, one which took minimum $100s and the other minimum of $500. I became very keen to see those accounts grow, and they did. (Great interest rates back then too)
I pay all my bills quarterly fixed exactly $250 each Internet Water Electricity Gas Rates
regardless of amount due.
top up the variations electricity and gas higher one season elec the other.
Buy $250 of store giftcards Coles, Safeway
Leave the Credit Cards and Bank cards at home.
The fixed balance of store cards means i can't spend more than that preset amount
I don't mind paying something towards the utilities every fortnight, and I don't miss the dollars or the bills coming. It feels good to be in advance with those on occasion, and I qualify for all the early payment discounts.
The only thing different I do from you, is to pay into the (Qantas Frequent Flyer) MasterCard Prepaid credit card. It is safe to use, with a pin number only you know, and no fees attached. The best thing though is the number of points it can accumulate scanning the Flybuys or Woolworths cards.
(Not sure how useful the Woolworths card will be for points anymore though)
Today I cashed in $200 worth of FlyBuys points for JB gift cars. As it happened my son would like a new ipad and the $200 plus another $25 from using my Qantas Frequent Flyer card, helps to take the sting out of the untimely purchase. Would have been more $s but spent some before Christmas.
Does the prepaid cc allow charging/top up via credit card?
I'll look at it for the incidentals (non coles, woolworths store.
Interest free is our friend in home loan offsets so a cc option is preferred if you know any?
There are 2 ways to top up the Qantas Frequent Flyer prepaid Mastercard; straight bank transfer of funds which takes about 24 hours to clear or the BPAY method which can take 3-4 days. I am unsure about topping up by credit card, but don't see why not, but you would possibly incur cash advance fees on your other credit card. Cannot use this card for gambling (even buying a lotto ticket). I do not pay any fees, or receive any interest either, with this account, although i think there is a minimum usage factor to avoid any fees. I prefer to use this card when purchasing goods online, if there is no PayPal option. It was designed to get more points at Woolworths supermarkets (as opposed to Coles), but I still get points when I use it to pay at Coles. (I also swipe my Flybuys card at the Coles checkout too)
Woolworths has changed their points system recently so I am not sure how the points are assessed there anymore. Coles has ran a few series of "spend $190? each week for 4 weeks" for 10,000 points ($50 value). Constant encouragement to scan the card for special points offers, double points etc.
I also have a Commonwealth Bank Visa card for which I do not pay interest or incur fees. That may be because there are certain bills on it each month, like the mobile phone and nbn bills. I simply pay it out as soon as something appears.
A system that has served me incredibly well:
Average ALL your bills (you can start with estimates and then work to add more detail - I find it fun to add more detail but that's probably just me): Eg:
Car bills……..45 (Rego, 3rd party, NRMA, mechanic)
Rent…………147
Groceries……..50
Petrol………..50
Other bills……48 (phone, internet, electricity, gas)
Big tech………44 ($6000 car every 3 years + $1000 laptop every 3 years)
Other tech…….30 (stuff I will need to replace eventually: furniture, white goods, etc.)
TOTAL………. 414 per week AVERAGE
Every week I tally how much I spent on these bills: "X", and do "414 - X = goes to Bills account". Pretty much every week it is less than 414, unless of course I pay rego, or make a big purchase.
The key for this system is that it truly reflects your REAL cost of living. All those things I have tallied are things I use every day, that I will have to pay for eventually. Money put aside in BILLS account are NOT savings, they are just accruals (or prepayments of something I know will come).
From whatever is left over of my salary then I go:
one third for my family (migrant here)
one third for myself in the present (going out, etc.)
one third for myself in the future (investments, savings for property etc.)
I've never budgeted, but I am not generally a big spender move light a tightwad. One thing I do regularly is check the bank balances becuase I use credit card for majority of purchases I miss the amount going through my wallet, but it is easy to check your ba lance online. I ALSWAYS have a minimum of $1500 in my general account for unexpected items. I never spend an amount that will put me below that limit unless it is an emergency, then once it is over that amount I can go back to spending on non essential items.
There is no secret really. Its like weight loss (Burn more than you put intake). Budgeting is spending less than you make. Write a list of all your expenses that you cannot avoid such as rent, weekly train to work, mobile phone if on contract. Even include the things you currently have like Foxtel or netflix etc that are essentially optional. Identify which are not essential and if you could go without or even reduce such as finding a smaller mobile option. Then there is the food, find out how much you actually spend on food a week and see where you can cut back or downsize. At the end you will have the excess money you need to live (hopefully there is some). Then take a small bit for fun and bank the rest into 2 accounts; 1 for emergency (car breaks down or something) and other is long term. Never touch the long term til you reach your saving objective.