Money and the cost of living seems to be what everyone is talking about now. And really it is no wonder why when it feels like absolutely everything is rising in price.

According to the research from Finder, the average person in Australia has $39,439 in savings as of August.

When I read this, I panicked, I panicked hard. I have just dropped back to working 3 days a week and a pay cut to concentrate on my mental health. Now I’m thinking, ‘How am I going to provide for my family and save for the future with the cost-of-living skyrocketing?!?’

A budget is telling your money where to go instead of wondering where it went
– Dave Ramsey

When it comes to my own personal finances, I figured it is about time to break the cycle of borrowing and paying back. So, to speak it is time to stop digging the hole and begin the long climb back up and out.

I know I’m not going to save thousands by the end of the year. And there is no way I would be hitting the national average of $39,439 in savings anytime soon. I just need to work on saving for tomorrow. If I can break bad money habits and work on creating better money habits the rest will come. The journey is a long one but for now I just need to concentrate on the path under my feet right at this time.

My journey to breaking the borrowing cycle

I began to look for apps for budgeting but couldn’t find anything which worked for me. So, I collated bits and pieces of information from the net. Information which made sense for me. At the end of the day, it was my personal budget, so it needed to work for me. Essentially what works for me might not be what works for you. Maybe you are on the search for a budget which works for you. You might adapt mine to fit into your budget or you might take bits and pieces to fit your needs.

How I have pieced together my budget

First step: I went through my bank account for the last twelve months. I wrote down every expense. Absolutely everything! I went month by month to make it easier to total up at the end. I also grouped the amounts into categories. Food, Insurances, fuel etc.

Second step: I then needed to work how much every category would cost per fortnight. (I did fortnightly as I am paid fortnightly) This helped me determine how much per fortnight I needed to set aside for everything.

Example: Because some things are paid weekly, and others are annually this is how I worked out the fortnightly amounts.

Third step: Set a saving amount per week. I’m not starting with anything huge, but I read somewhere that you should always pay yourself first when budgeting. Once you have decided on an amount add this to your other fortnightly amount you worked out before. I then add 15% to this amount. To cover for those unexpected items which can up each pay cycle.

Fourth step: I add up the amount of money coming in per fortnight. I then take away from this amount, the fortnightly total. If your end total comes back as a loss, then you need to go back and tweak. Where can you cut costs? This took a bit of time going back and forth, but the only thing I didn’t change was the amount I was putting away to savings.

Fifth step: I set up sub accounts in my bank account. So, when my pay came in, I could divide it up into the set accounts. I have a main account, an account for clothing, presents, holidays, bills and savings.

Sixth step: I have made the budget on my iPhone in the numbers app. This way I can be accountable for what I am spending each day and ensuring I am on track. I even have a set limit on how much I can spend at the food shop each day.

Example: I set my budget for the fortnight, but I also have a working column. That way I can keep an eye on my spending for the fortnight.

If and when there is money remaining at the end of the pay cycle – I send this amount to work at paying off those borrowed amounts. Ie credit cards and car loans.

Never let a stumble in the road be the end of the journey

Hopefully you find something which helps you in your journey to saving for just tomorrow.

Maggie x

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