I have so many people come to me and ask how have I saved for or paid off or lived my life and it is pretty simple.
Now for many of us this can be a dirty word and let me tell you I was exactly the same. I didn’t care where my money went or what I spent it on. As long as I had rent and money left over, I was fine. Life was good.
I paid for the big bills directly out of my paycheque and lived off the $100 (if it was even that) for the rest of the fortnight. Normally swiping my credit card for the splurges, I wanted. Everything was good.
I am going to stress that once more. Everything was good until it wasn’t and now, I am going to cut to the chase. Once I realised I needed to GYST’s* my life it got a lot easier when I made a budget.
Now a budget for me is simply a plan of attack. It is where I sit down and workout what future self needs so that present self can start saving for it. It is where I take a big old look at my life and what I know I can control and that is the bills that will be coming into in the next year or so. Oh, and also future self always thanks past self for this.
For me it is a simple as that. Let’s break it down.
Work out what bills you will need to pay for, how often you pay for it and how much it costs.
E.g. Car insurance. I pay once a year, it cost $800 and I have a whole year to save so I split that $800 into 26 paycheques, I send that money into a separate account and repeat till the due date.
That is called a plan of attack.
To level up this plan of attack, have some control over your money and really have an idea of where it goes you need to do this for all your bills. Everything that you need to pay to live the life you are living is counted. This includes all fortnightly, monthly and yearly expanses. We call it sinking funds.
That is how I plan my finances or as many like to call it budget.
To read it like this may seem almost simple and a whole ‘why have I not done this before’ and to be honest. It is simple and easy, it’s the sticking to part that gets hard. Buckle in though because we are just getting started.
By Broke Blogger
Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.