28 July 2007

Organising your money

We are going on a short holiday soon. It will be a trip on the tilt train to visit good friends in Townsville, about 2000 kms north, in the dry tropics. We saved the money for the holiday from our meagre monthly allowance, by putting whatever was leftover in to our change jar.

Let me explain.

We spend $355 a week, or $1420 a month, on everything we need. Of that $1420, $765 is put in the bank for our fixed expenses like payments for rates, electricity, phone, car and dog registration, insurance - health, car and house. When the bills come in, the money is already there waiting, the bills are paid by direct debit. Any money left over in this account is transferred to a no-free interest bearing ING online account and goes towards our savings.
Out with the old and in with the new.
This is the leftover cash from last month to put into the change jar,
along with a new allocation of cash for this month.

We also withdraw $655 in cash and that is the money we live off for the month. That covers food, petrol, garden, dogs, cat and chook food and flea and tick meds, medical and chemist, postage and house maintenance. We also give each other $40 a month pocket money. Yep, ten dollars a week to be spent on whatever our hearts desire.

I have a number of ziplock bags and I put the allocated amount for all the above items into each bag. So I have a bag with $50 for chemist and medical, a bag with $250 for food, a bag with $50 for the animals etc. Organising my money this way has helped me a lot with budgeting and knowing when I've reached my limit. Actually seeing the money separated in the bags has been the one thing that's kept me on the straight and narrow. When nothing is left, well, nothing is left, so I can't spend anything. But I always have money left over. Usually it's about $60, this month it was $65 and that goes straight into the change jar.

My change jar is an old Carl Larsen tin that hold all our spare coins and notes. If I have any coins in my purse after shopping, they go in; we sell our eggs, that goes in; money left over from our month's budget, that goes in. I now have $255.40 in my change jar. We haven't given up anything to save that money, it's just leftover cash, that we SAVED. It's easy enough to go out and spend it, but the trick is to not spend and SAVE instead. That $255.40 might not seem like much in the overall scheme of things, but when it's collected from a very tight budget, it's not just a big saving, it's a confirmation that it is possible to live well and be happy while spending very little.

The coins from the change jar - the notes are out of shot.

We do have our pocket money to spend during the month and although H always spends his, I hardly ever do. Not spending becomes a part of you after a while and spending on unnecessary things seems kind of wasteful. In the old days I would have thought nothing of spending $10 on a magazine, now I think it's pointless. So I usually save mine for the makings of small gifts - fabric or yarn and the like.
All the bags full for the month and my $40 pocket money for my purse.
I have two purses, one for my money, one for household money.

I have to say too, that organising your money like this takes the thought of it away from your everyday life. You don't have to think about money because you know it's all taken care of and waiting in your bags to pay bills and to live on. You stop worrying about money, you don't think about it all the time and it seems to just take care of itself.

If you're having trouble trying to manage your money, try the ziplock bags to see if they help. Just divide the cash you have to live on and put it in your bags. Be responsible with it - this is about personal responsibility and change - and after a couple of months you'll probably have settled into a new way of living with your cash. Good luck.
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