Controlling your money

There's no doubt about it. Almost everyone has money problems at some time in their life. We all use the stuff, it is a requirement of modern living and for the most part, we don't get much of an education in how to handle it. Usually our lessons are by trial and error and many times we learn a lesson too late to avoid a financial disaster.

Hanno and I made the choice to live on a very meagre budget. We have no debt, an emergency fund, we have money invested and we have shares, but we choose to live frugally. Our total budget for the month is $1370, of which $765 is left in the bank to cover bills and $605 is withdrawn in cash to spend on our needs. The $765 covers car, house and private health insurance, phone, internet, electricity, house and land rates, car registration and maintenance etc.

This is the breakdown of the cash withdrawal - $605:

• Groceries $290
• Fuel $120
• Health $50 (includes vitamins, doctor, pharmacy)
• General $145 (includes garden supplies, dog and chook food, clothing, pocket money)

The only amounts that are always spent are fuel and pocket money, everything else we usually underspend on. We get $80 a month ($40 each) pocket money. That may be spent on anything we desire, or saved for a double whammy the next month.

The one thing that allows us to be so frugal, apart from our attitude to spending, is our stockpile. Stockpiling allows us to live well on food we usually buy on special and if we are running short on money, we can stop spending on food altogether and live off the stockpile. I was please to see others say they do this in the previous comments.

Let me say here loud and clear: being thrifty is not about being cheap, miserly or being poor. It's more about recognising our own needs and not exceeding them. Now for me, my needs might be that I require to eat healthy food, buy local fresh dairy products, a new car every few years, broadband internet and enough wool and cotton to knit. Your needs, on top of what you need to stay alive, might be organic food, pay TV, a motor bike and good clothes. Or maybe you're more into travel, so a trip overseas every three years, dance class for your daughter, soccer club for your son, 5 magazine subscriptions and 6 books a year. It could be anything within your means. The choice is yours, and you make that choice after you've done up your own budget to find out what money you have left over after you've paid EVERY bill you know you'll receive during the month.

Everyone makes their own choice because we all have difference circumstances, desires and needs. But when you make your choices, you stick with them and you don't add other choices on top. That is when you get yourself into hot water. Unless you're a millionaire, you have to recognise the fact that your money is limited. You have to live within your limits.

This is where personal responsibility comes in. You are aware of the choices you make and accept the consequences of them. I'm sure a lot of us would like to go through life like we did as teenagers - buying whatever we wanted, doing whatever pleased us. If something goes wrong, someone fixes it. There comes a point though that we make a transition to a more mature point, where we think carefully about what we are able to do and what we can't do. We examine our income, write up budget and make our decisions on what we can do within the means we have available to us.

I know there are some of you who will be saying: I deserve a treat every so often. Or, I want to enjoy my life! Maybe you do deserve a treat, but I think you also deserve to live a good and decent life, unburdened by debt. How much of life do you enjoy when you have too much debt? Doesn't the burden of paying off debt dampen a lot of life's joy?

A number of you have allowed me to take you by the hand with advice about other things. I wonder if I can do it with money and budgeting. Do you trust me enough to believe me when I tell you that a budget will help you organise your money? Will you follow my lead on how to manage money? I wonder. This is a tricky one.

I would like to pass on to you three things that will help you:

• Stop spending.
• Make a budget and stick to it.
• Stockpile

But you have to supply the personal responsibility and you have to find the joy of life and not just the pleasure of spending. I know it's much easier for me to write these words than for anyone to act on them. I know it can be done though, because I have done it myself. I used to be a spender and now I'm not, my attitude to spending is completely different now.

I also know I'm at a different stage of life to a lot of you, but that is what I mean about making your own choices. YOU decide what your choices are and as long as those choices are within your means, and you stick to your choices and not keep adding others, then I'm sure you can manage your money well

Tough times are predicted in coming months so some good decisions now may change your life. Are you game enough for this? Can you organise your money instead of it organising you? I wonder who can do it. I'm happy to offer my help if you need help. If you get stuck on your plan or your budget, email me and we'll see what we can sort out together. Good luck everyone.

Niki at rural writings is also writing about money at the moment. Check out her post here.

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