Our Finances Suck Part 1 - Budget

A few weeks ago I mentioned how our finances suck....big time.....and how I hope to focus on our situation and try to turn things around this year {well what's left of this year!!}

So I figured it was best to go back to basics and start with looking at our {pretty dismal} BUDGET.

From my research it seems that there are a lot of programs out there to help you set up and maintain a budget, such as Quicken and  Mint.  There are also a lot of Apps available such as GoodBudget, Mvelopes and HomeBudget.

Quite a few of these programs and apps sound like they could be very useful tools and I would seriously suggest taking a look at them to see if you can find one that would work for you.  I have to admit that I saw the word 'sync' and freaked out a little...technology and I have a bit of a love hate relationship at times...especially where syncing is involved!

I have decided to revisit my Excel spreadsheet budget for now, because even though a bit out of date it will be quicker for me to update that than to start again at the moment.  I might look into the various programs and apps at a later date and with a clearer head!

With Excel you will find that there is even a template for a personal budget if you want a guide with where to start...though it did scare me a little bit {okay a lot actually!!}.

We probably all know that we really should spend a few weeks tracking our household spending to make sure that we know where our money goes....I tend to skip this step but decided to give it a go this time....all you have to do is keep every receipt or note every expense in a little diary....get hubby to do the same.  After a few weeks of keeping track you can then get a good overview of where your money goes on a day to day basis...like that magazine, or cappuccino, or that snack bar....believe me it really does all add up!

After tracking your spending the real  fun begins!  It's time to  gather together your bank statements and utilities bills for say the last 6 months, together with documentation of your income sources. And now you need to sit down and put all of the information together.....coffee will help....as will copious amounts of chocolate!!

I converted all of our expenses to fortnightly as we are paid fortnightly. My spreadsheet is extremely basic {because that is all that my brain can handle!!} ...it has our expenses listed in one column...you could group them into categories eg. household, school, car etc.. or list them alphabetically...whatever works best for you really.  Once calculated enter the fortnightly expense into the spreadsheet.  When you have finished use the formulas to add up all of your expenses.

I then have a column for our income.  Enter all of your income sources and the corresponding fortnightly amounts.  At the end use the formula to calculate the total.

Now cross your fingers and look at the two totals to see how your financial position looks.

If the income total is higher than the expenses total then 'yay' .... things are looking good...perhaps you can allocate the difference into a savings or emergency fund.

If the expenses total is higher than the income total.....then welcome to the club....though I'm not sure it's a club that you want to belong to!!!  What I had to do here was to go back through all of the expenses and make some adjustments.....some expenses will be relatively fixed such as mortgage, insurances, school fees etc.. but there will be some that you can make adjustments to in order to get your two totals to balance....you might have to reduce the amount you have allocated to grocery shopping or birthday spending until at the very least the income and expenses total are the same!

Maybe you've had to do quite a bit of tweaking {like me!} to get your totals to balance but at least now you have a good idea of what money comes in and goes out each fortnight and the next step will be to develop a plan or system to implement and keep to this budget.

So there's a nice bit of homework for you if you haven't visited your budget for a while!

Linking up with Jess from Essentially Jess for #IBOT

I'd love to know what works for you?  How do you do your budget? 

Is there a program or an app that you use or would recommend?