Tracking 2015

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Today is Saturday.  Where did the week go?  I am very busy at work so although I have been thinking about my blog that is as far as it went.

Not only is it Saturday, it is Saturday 31st January.  The final day of the first month of 2015.  1/12th of the year gone.  Have you already forgotten what you resolved to do better/differently/more consistently in 2015 already?

BudgetingOne of my goals was to actually track how much we spend.  We have never worked to a real budget – actually allocating a certain $ value to each item/category but we keep careful track of the regular bills – rates/insurances/phone/internet but is the variable spending that is more difficult to calculate.  I do not have a specific amount of money for groceries each week as I tend to bulk shop for dry goods and meat and buy perishable items on a weekly basis.  I need to average my grocery spending over at least 6 months to get a fair and accurate idea of how much we spend.

As I said it is the last day of the month and we have been shopping so there will be no more spending today.  The grand total of our variable spending in January was $5,134.53 – yes, over $5K!  Almost exactly half of that was airfares and accommodation for our Singapore holiday later in the year. So, $2,618.73 looks somewhat better.  This figure includes food, clothes, gifts, hobbies, eating out, entertainment, alcohol, car fuel and maintenance, haircuts, public transport, pets, medical/dental and incidentals.

Apart from the holiday spending which is really a one-off, the categories with the highest spend were food $623 closely followed by public transport $620.  This is really interesting because what finally prompted me to track our spending very carefully was that I wanted to know how much we would need to live a comfortable lifestyle on our terms in our retirement.  Giving up paid work is a few years away yet but it is important to budget for life without regular employment.  We will still need to eat when we are retired but public transport will cease to be an issue as all of that expenditure is related to our lengthy commute to the office.

Do you know how much you spend?  Working or retired?  I would love to hear your comments.

Making Ends Meet – Expenses

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We all have different expenses and priorities but I will try to cover them all using some broad categories.  Not all categories apply to everyone and please add any of your own.  Please feel free to let me know what I have omitted.

The necessities are really shelter, nourishment and clothing.  There are lots of other things that we see as essential in Western cultures but if we strip it all back these are the bare necessities so we will start with them first.

Mortgage repayments or rent
Food
Clothes

Other ‘essentials’

Debt repayments
Transport costs – car and/or public transport
Utilities – water, electricity, gas
Communications – telephone, internet
Heating, cooling
Education costs
Health – including health insurance
Other insurances – house, car, life

The first thing you need to do is to know how much you are spending in each of these categories at the moment.  Some, like rent or mortgage payments will be easy as it is a set amount.  Decide on a timeframe such as weekly, fortnightly or monthly and then work out how much you are spending in each category for the specific timeframe.  I would recommend weekly or fortnightly, however, monthly is an option if you are paid or receive benefits as your major income source on a monthly basis.

Money problems

Now, you need to add up what you are spending on the essentials and what income you have.  Is you income enough to cover your essentials?  If not, you will need to work out how you can cover the shortfall.  Increase income? Reduce costs?  Even if you have calculated that you have enough income to cover the essentials, now is not the time to be feeling smug.  Remember, there is no allowance here for gifts, treats, outings, birthdays, Christmas, haircuts, coffee, snacks or eating out.  If you think this sounds extreme, it is, but it can be done.

No spend
Read this link from Frugal Queen’s blog.  http://www.frugalqueen.co.uk/p/our-story.html  I began reading this blog about 3 years ago and it is absolutely inspirational.  Froogs pulls no punches about what has to be done to improve your financial situation but she leads by example and we would all do well to follow her lead.  Once you have read the previous link, I would strongly suggest that you take the time and read the blog from the very beginning.  You will not do it all in one sitting but you will start to see that by taking some fairly drastic action you will see the light at the end of the tunnel.  Some things will be relevant and others will not but the message is clear – take responsibility for your own financial position and do something about it now!  Cut your spending to the bone.  There is no use mincing around the edges and wailing that you can’t do it.  You can and you must.

Tomorrow I will cover what I refer to as ‘Emergency Action’.  These are things that you can do right here and now that will make an immediate difference.  You will not necessarily be able to continue such drastic measures long-term but it will help to kickstart your journey to balance the budget.