Budgeting 101 - Introduction
One of my passions has always been to help people; and basically whatever I was going through at any given stage, that was the area of 'passion' I thought that I would help people in longer term; whether it be through counselling, health, allergies, nutrition... But as I have worked through these issues in my own life, and let them go - my passion for 'helping' people in this area, also dwindled and died as I moved on. But the deep desire, the over-riding goal, to help people in some form or another, has never died.
For me it has always been a case of coming alongside people, and helping them work through things together - I have never been interested in big group meetings, or the theoretical aspect; the 'dream' has always been to gently walk beside someone(s) on their journey, quietly encouraging them and teaching them everything I have learnt, in the hope that it inspires and encourages them.
As time has gone on - I have come to understand that people need help with everyday practical things; things such as basic budgeting skills, basic cooking and nutrition skills, basic parenting skills, and sometimes just basic social skills (confidence in themselves, rather than the inability to interact with others per say). And as time has gone on, this is where I feel drawn to... not some big 'self-help' blog, not building a big business where you charge people big money to hear you talk, not some therapy session where you draw out their deepest dreams, and tell them to 'just do it'. Just basic skills to help you along lifes' highway feeling a little more loved, and a little less overwhelmed.
And I got to do just that recently... the request came to me, I didn't go chasing. But it confirmed to me that I am heading in the right direction; that little nudge of I could be 'doing more' to help others, that desire to pursue these areas mentioned above - it's all starting to make a little bit more sense, and I am excited to see where this leads.
So the other night I got a PM from a friend - a cry for help, to do with budgeting... They didn't know where to start, and were feeling overwhelmed with the enormity of it all. So I sat down and crafted a well thought out and well written email explaining the basics, and where to start - NOT! I just sat down and typed, and hoped it all made sense; I could feel her heart, and I had been there myself; so I knew she just needed some encouragement, and a place to start. No judgement, just a starting point and reminder of the pay-off once things felt more under control again!
Budgeting is hard work - it requires discipline and consistency; and regular revising, as wants/needs change all the time. And I think this is the key really; budgeting can change as your needs change, I didn't really get this at the beginning; and would get stuck and then give up, believing I had failed once again. But once I understood the secret of revision, and the changing needs of our world today - I started to really get a handle on it, and make things happen for us!
But I am a quiet wee rebel underneath it all - and I start my advice off totally opposite to what everyone else says...
I heard over and over again - track your spending for a month, and then sit down and start to work through your basic requirements, and go from there. But this paralysed me, and every single time I would give up and throw the towel in; the tracking was just too hard.
But one day - two summers ago, I just spent the day on excel, following along a YouTube Tutorial, and set myself up with a working budget. I already had a pretty good idea of what our basic needs and requirements were, it was just a matter of allocating adequate amounts to each category and then tracking our spending against each area after that. I faithfully followed this system for nearly a year; but decided it wasn't enough, after working in accounts for so long, I wanted a system that allowed me to add transfers between accounts and have a little more sophistication! We now use YNAB You Need A Budget - it's great, but very americanised, and really not aimed at those of us outside of the great US of A!
But I think - between those early excel days, my years of working in accounts, and now nearly twelve months with YNAB; I have found a system that works for us... and gives us a way of tracking our spending. I don't know if I'll renew our YNAB subscription when it comes up, or whether I'll be brave and try my hand at setting up my own excel spreadsheet that fulfills ALL my needs in one place or not; we'll see how brave I am!
But, after the reaction I got from my friend the other day (Thanks again - this has really inspired me! So appreciative of your time - I think you have a real calling in this area!); I thought I would share our system with you all as well, in case you needed some encouragement to start this journey...
So - your homework, before I publish the next post... is to write a list of your regular expenses, and figure out your exact income. No tracking, no allocating, nothing else yet. To get you started - I will put a list below which covers most families basic expenses; but you can add your own personal extra's to this, and change whatever doesn't suit:
* Groceries (including takeaways / toiletries / cleaning stuff / petfood)
* Mortgage / Rent
* Petrol / Travel Expenses
* Pocket money / Family money
* Tithe (if you attend a church)
* Power / Gas
* Phone(s) - landline and mobiles
* Insurances (these can be yearly, or as often as fortnightly)
- Car / House / Contents / Life / Medical etc
* Any charity giving
* Bank Loans / Credit Card Repayments
* Rates - house / water / regional
* Hair Appointments
* Clothes / Make-up / Shoes
* Subscriptions (e.g. Sky, NZ Herald, Magazines)
Savings - Yearly:
* Medical / Dental
* Car Rego / Warrants / Repairs / RUC if you have a diesel vehicle
* Kids/Adults Activities (sports / music / art)
* Home Renovations
* Savings Goals
* Debt Repayment
Hope this has given you a good start on your list... you don't
need to break them down into categories just yet; I was just
encouraging you to think beyond the day to day expenses,
and take into account the less common yearly ones as well;
and also think about the general things such as gift giving for
birthdays / Christmas, as well as clothing and hair. When
you start budgeting, all these things are taken into account...
but oftentimes forgotten or over-looked.
So - grab yourself a coffee and a piece of paper, and get that
I will see you next time, list in hand!