Sunday 15thAugust 2021
We all know that we need a budget. One of my favourite all time quotes is this:
‘A budget is telling your money where to go instead of wondering where it went.’
There are many, many resources online to help you to create a budget. Some of my favourites include Every Dollar, You Need A Budget (YNAB) for my US friends and in the UK, we like the free Excel spreadsheet from Money Saving Expert and the paper and pencil method from Christians Against Poverty (CAP). There are lots more to explore and choose from, use your favourite internet search engine to have a look at what’s out there.
We have decided to create our own budget using Excel, mainly because we live in East Africa and none of the forementioned budgets really suit our needs and it’s always a bit boring to change the currency! You can purchase software to help you but you can always use a paper and pencil method too!
Basically, a budget is list of your incomings and outgoings. There’s not too much Maths to it – but nothing very technical, my 12 year old daughter can do this!
Here’s what we start with, kindly note that we get paid every month so we have a monthly budget. If you get paid fortnightly or weekly, you can tailor your budget to suit you.
First, list all the money that you have incoming each month.
Then, write down all your expenses.
We start with ‘Giving’ first as that’s important to us.
Then list the big stuff: rent, food, transportation, debt and so forth. This is a great way to see exactly what’s going out and if you need to cancel any subscriptions that you are not using.
On a side note, I believe that setting a date each year to carefully go through each bank statement and cross check them with what you think is going out is such a good use of time. In the past we have discovered that we have been paying for insurance policies that we thought we had cancelled or double paying on phone utilities. Don’t ever assume that the companies have this sorted for you – you need to be in control of your money!
OK, now let’s get back to the budget! Don’t forget to include savings in your expenses – it is super important to save for a rainy day. We have personally spent over $600 this last month on car repairs that we didn’t see coming, thank goodness for our emergency fund! Other savings can include Christmas, dentist, vacation fund, annual car service, house insurance and things like that. We have found that when you spread those costs over the year, it’s much more achievable than paying $530 for the dentist in one month!
Another expenditure is FUN MONEY! We have $50 a month and includes purchasing films from our favourite streaming sites. We must make sure that everyone in the family is happy to make the purchase before we spend it!
When creating our monthly budget, I also find it very useful to complete it with my diary in my hand. Long ago, I believed that we just needed to create one budget as one budget would work forever – WRONG! Every month is different, using the diary also reminds me that I have family birthdays, celebrations or annual fees eg Amazon Prime coming up! J
Hopefully, you will create a budget where you have given every dollar a job to do! This is the aim. It will take time and don’t get disheartened. Our top tip for you is to find some friends who can encourage you along the way, we all need cheerleaders!
And finally, for those of you with a reluctant / overwhelmed spouse like mine, we call the budget the ‘Spending Plan’. I feel it doesn’t have such a negative connotation like the word ‘budget’ and it helps Bob get on board – which is never a bad thing!
If you have any further comments or suggestions on what helps you to create your own budget, then please do leave a comment in the comment box below!
Thanks, and God bless,