23 January 2008

Staying on budget

There is something about January that always sends me a bit nutty. It's kind of a non-month for me. I can't quite organise myself, I'm forgetful and a bit crazy. January is a mad jumble of holidays, relaxation, cricket and the self reflection that comes at the beginning of the year, along with the excitement of new year's celebrations, Australia Day my sister's birthday and going back to school. Even though I have no children at school, when the school holidays are on, it changes the amount of traffic on the roads and the sounds I hear during the day. The last day of holidays I hear the neighbour kids making the most of the last day - there are bike jumps set up out front, crazy games being played and usually a cricket match; the next day, it's just Hanno and I with the sounds of the whip birds.

So it never surprises me to find that every January I have to reorganise my money and spend a period of time tracking what I spend. I've written about this before here, but just to recap, I generally withdraw an amount of money in cash that we use for petrol, food, doctor's bills, chook food etc. This money is put into plastic bags marked for their purpose and as I go through the month, I take cash from the bags as I need it. It really is a great way to organise our money and I always know how much we have for the various things we need to buy.

However, although this system works for us every other month of the year, in January I lose focus and usually have to borrow from one bag to pay for other things. Why am I doing this? Who knows. We usually have money - anything from $20 to $100 - left over at the end of every month, but not in January.

I need to steady this ship. I've put a small notebook in my bag and every time I spend money, I will record it. In a week or two, I'll see what I've been wasting money on and I'll be able to work out ways of stopping it. It won't be anything major, it will be little things like a sandwich when I haven't had time to pack lunch for work, or going over my postal budget - things like that.

You might think I have it together here, and generally I'm quite controlled about what I buy, but I'm not perfect and I do need to refocus occasionally and get back on track. I wonder if others have this same problem. Tell me what happens when you go over your budget. How do you recover from that before it becomes a disaster? There is no shame in this for any of us, we all do what we do. But we can help ourselves, and others, by discussing this subject honestly and sharing how we stay on track with our spending.


  1. Rhonda,

    I wish I had more space to talk about money. (My whole life of 38 years) I have always been concerned in some way about our money.

    I grew up not really poor but without much. My dad left my mom when he relized how expensive children were. My dad worked hard and saved. He now has enough to retire and then some:)

    My mom took care of us and worked. We lived with my grandma and money wise there was never enough. I had a wonderful life:) I never knew we didn't have much... until I grew up.

    Now as an adult my husband and I have over spent for many years. We have had as much as $60,000.00 worth of credit card debt.

    We are now trying to get debt free and still enjoy our "simple" life.

    All these years trying to make sure my children didn't have to do without like I did. We are now seeing living more simple is the answer:)

    So to make a long story shorter....I pay all the bills the first and the end of the month. What ever is left we use for groceries,gas ect... We do try to save a hundred dollars a month although there are some monthes we have to dip into it.

    We are hoping to be debt free by the end of this month and then we are going to start paying off our house.

    It really is a mind set. I want to be happy with the simple things of life and I want to teach my children that they don't need the "in" thing.

    Well I have taken a lot of space here... I am learning a lot from you Rhonda you are an inspiration:)

    Love to you,


  2. Renee, you take all the space you need to, sweetheart. You and your partner have done a wonderful thing to pay off that amount of credit card debt. Congratulations.

    You're right, it is a mindset because even though most of us just fall into spending, you can teach yourself to not spend. Good luck with getting rid of the rest of your debt.

  3. Hi Rhonda Jean,
    I find the best way for me to save and not spend is just to stay out of the stores. I am a fabric junkie . I do use it . WalMart is close by(fabric) and theres certain things we buy from there when it comes time for Walmart buys Dh&I make a list and he goes alone.It works great!
    In Oct. last yr. we talked it over and we no longer go out to eat. We use to go on a date once a week we'd go out to eat as the prices went up &up , we now do other things for date night. We both Love picnics and we both enjoy sipping tea . We have a couple places we Love to go for picnics, not we pack a lunch and go .We make a pot of tea and relax and talk the evening away on dreams we hope to make reality. Us & Friends no longer go out and eat we cook pot luck and share a meal at one of our homes.
    I find the older we get the less we want.Somethings I think we're better off to buy new, what I can I buy 2nd hand (reduce,reuse recycle)
    We paid our home off early, our car is paid for, the motor was gone instead of buying new or used we had a new motor put in.
    I stock pile I now have it down to where about all I buy is wkly. specials.This takes some planning. I'm not much for meat when I cook example spag. Often instead of meat I grate zuc. squash so slice thin. I cook a double batch and freeze and not tempted to go out to eat on a busy day.
    I make my cleaning supplies.
    I could go on and on but don't want to take up more of your space.
    Thanks for all your encouragement and all the time you put into each post. You are touching so many lives in such a pos. way:o)
    Blessins', Lib

  4. Hi Rhonda,
    I redo my budget every year around this time, it reflects a change in our income and also with growing children their entry into the workforce and the resulting decrease in our direct spending. I also use the baggie system, keeps me honest and there is no borrowing from peter to pay paul. If I do't have it I don't have it.
    We have payed off my hubby's $30k cc debt, 2 cars bought our home and paid half off so far, and have now started an investment portfolio, and have an emergency fund.
    A year ago I was in an accident at work, and due to the ineptitude of the manager I wasn't paid at all for 10 weeks. This was from november to the middle of feb. Right over the xmas/newyear period. Thanks to our emergency fund and the fact that I always have an emergency budget written up with just the barebones in it, we did very well and the kids nor anyone else would/knew that we were down 60% of our usual income. I earn the $ in our family and not having any money come in each pay period was a bit of a shock but we survived.

    anyways, enough rambling


  5. I am so relieved to read this post today Rhonda Jean. Thank you for your honesty and open-ness. :) I have been really beating myself up lately over the mess our finances are currently in. Most of the year I do well with tracking etc but January is such a mess of a month that I'm behind in tracking and basically in a mess. I *know* this means we've spent more than usually. Our years budget used to start in January but now we start February 1st. Otherwise it's too much pressure over Christmas and New Year to be organised and make a good start. It also lines us up with the farms budget which also starts Feb 1st. The good thing is that any little discrepencies are covered by the surplus we usually have built up over the year by careful spending.

    I do wonder if it's okay to have a more relaxed month or whether I should try harder to keep things under control? Any thoughts on this would be greatly appreciated. :)

  6. Very timely post RJ! I noticed last night that my budget for Jan was way over and in a mess!!! I tried to hide spending into different categories etc..I came to the conclusion that January blow out was to be expected. January sales on essential items like underwear, was a reason for me to attentively do a stocktake of any essential items that may be needed now or in the next year. I bought an extra item of each to ensure that I would do no more spending for the rest of the year in these areas. Thus keeping with the principle of buying only when items reduced. Also noted that my grocery bill was down,entertainment was up and petrol up (all linked with a very slight increase in going out etc during the holiday season).

  7. Well about 2 years ago my hubby and i decided to sell the house, move out of state,( DH got a transfer to the same company just different state)and pay off all the bills with the money we got. We now live on one income and have downsized so much. The begin of this year we started a new way of budgeting by taking each bill that we get and setting aside 1/2 of it from each paycheck ( dh gets paid every 2 weeks). We used to pay the bills so that some times we had an "extra" check(sometimes 3 checks in a month) so we would spend the money and the following month be short. We now have a book with each check and a running total of what is in each catagory...rent, groceries, Christmas fund, Clothing ...etc. and it works out really well. If we dont have the money in the catagory to spend then we dont. We were so in debt before the move due to the house and the huge bills that went along with it. It was hard to give up the house but it was too much to deal with at that time. There are times when you get off track but there is no need to beat yourself up over it. I figure i learn something from the mistakes and improve it the next time.

  8. Honestly Rhonda, sometimes we are just on the same wave length, sister!!! Try to find time to read my post for tomorrow...money, money, money...

  9. Rhonda,

    Timely post indeed. I had a minor meltdown this past weekend, my VISA was frozen due to my ineptitude at forgetting to pay the monthly minimum. It isn't much, but as I've basically had ZERO income for January I couldn't pay it. Not working for 7 months and not even being eligible for a government income credit for the last 2.5 months of that not working makes life difficult!

    Luckily, I've just started a new job ...but I don't get paid until Feb. 1 Grr! I was going to rely on VISA to get me through the next two weeks, mainly for transportation costs. I've got quite a nice stockpile of food so I wont starve.
    But well that wasn't the case.

    So after a good cry I phoned a relative and asked them for a loan to cover my minimum VISA payment so that i'll then be able to pay for transit until Feb 1. Confusing, yes?

    In any event, I put together a spreadsheet, outlining in black and white the money coming in and the monies going out each pay for various bills( including dreaded student loans) and necessities. Granted my cc debt is very tiny in comparison to others here it still hangs over my head as an ugly reminder that credit is no way to live ones life. I only have it for emergencies.

    I also try and put a bit of funds away each pay period into my rainy day account -- which is designed to cover things such as unemployment etc... I also pay into a retirement fund each month, regardless if I am working or not, one is never too young to start that!

    When I am working I am very good at paying bills on time, often paying more than the required amount. These last 2 months just ran away on me. I am thinking of trying to use the envelope method that others write about and with great success. Not to certain how it will work out, so I'll try it for a couple of months and see. I might do mine per pay period instead of monthly.

    I'll keep you posted on how it works out.

  10. Rhonda,
    I find January a bit challenging too, I think it's a month to catch up after the holidays.

    Something I am trying hard to do the rest of the month and into February is to buy as little groceries as I can. We're needing to pinch a bit more around here and it's the most logical place to start with.

    Like yourself, I try to use cash for home expenses, and I'm trying to keep better track of it too. I've not been perfect in it, but I find having to write it down does help.

    I know this is so very off-topic & hope it's okay to share, but I'm heartbroken to hear about Heath Ledger. What a wonderfully talented young man he was & it's so sad to see yet another young famous person's life cut short too soon. I imagine this is quite a shock to the aussie people.

    I'm so thankful for my little simple life.

  11. I'm hopeless with money, not in the sense that I can't add or anything, but in the same way that I'm hopeless about other stuff, too--eating healthily, cleaning, keeping up with my studies. I love organising and making grand plans, but they never go anywhere. A few days go by and I get distracted (often by another project) and that's the end of it.

    I'm an impulsive shopper, mostly with things for the home, fabric, sometimes little jewelry items. It sort of swings a little. I don't go beyond what we have, but I tend to use it up. So then if something unexpected shows up (unexpected for me at least), like an electricity bill for the whole last year, there's some stress. And money really does stress me out.

    One thing I've done is create a budget account. It's perfect for me, because I got to make a grand plan, figure out how much money should be transferred every month, and then I get to forget about it, because it all happens automatically. I just need to check once in a while and make adjustments if prices change. This is really good because we just moved into a larger apartment, so now we have loan payments every third month (would have been a nasty surprise) plus my husband has just started paying off his student loans (every other month). Since irregular bills were what really tipped the whole thing, I got the budget account set up just in time.

    Another problem is food... Especially right now, since we just moved. I'm putting in the kitchen myself (we can't afford it otherwise and my husband isn't handy) so it's just a big old disaster room with a nasty floor and holes in the walls. I set up a little mini-kitchen in another room with a hot plate and a plastic tub for a sink, my little electric kettle and toaster, but it's really hard to cook that way, so so far I've actually only made one dinner. Part of the problem is that all our food is still packed away, too. I can't unpack it because there's nowhere to put it!!! So we've been spending a lot of money on junk food. :-( I need to do some research on one pot meals--and find a cutting board.

    The good part about doing your own kitchen is that I've got to design it myself--so I've made sure there's tons of cabinet space for hoarding, er, stockpiling. ;-) Plus we've got two basement rooms, and I've put an old cabinet down there, so I'll be able to stockpile down there, too, should the need for even more space arise. We are only on the first (european--second american) floor, so the basement is not that far away, it's like having a little private cellar.

    Sorry for the long rambling post!


  12. So I read your previous $ post and you said you place your leftover "bank" money in an ING account. Do you feel secure in ING? We are looking to transfer a bit of long term savings from an account that we are starting to feel insecure about. Of course AU may have different rules about how much of the $ is insured than the USA...

    I need to also buckle down with a budget so your post is quite timely. Thanks. Paula...a blog reader :)

  13. Rhonda,
    I think your post about staying on budget is very timely! With all the doom and gloom about our economy being expressed on news programs recently, it just goes to show us that we need to be frugal, stay on budget, and discipline ourselves to get ahead of the game. Of course this is all easier said than done!!
    January is a hard time for budgets especially after the holidays! We spent a bit too much for Christmas and we are paying for it now! One thing that has helped out is that I am cooking from what is in our pantry and freezer. Groceries bought so far this month include only milk, potatoes, lettuce, and bread (I need to start baking at home!lol). After hubs and I looked in our freezers we were shocked at how much food was in there that we weren't really using! Our goal is to eat as much from our freezer and pantry for the next few months and see how much it saves us.
    We have also reduced our satelite tv package from the everything package to the bare minimum package. Do we NEED tv? Probably not, but we do love to watch the news and sports programs. One step at a time, huh?
    This is a windy post and probably not very helpful but it's just a few things we have done to help get through and improve our budget. Blessings to you and thanks!


  14. Hi Rhonda Jean,
    This is my first time commenting but love reading your blog every day. In the last two years DH and I have been gradually increasing the amount of things we grow, make and do for ourselves, and do without! (This has given me a tremendous sense of freedom from our current consumerist society's pressures)

    Your daily blog has become a great source of inspiration and ideas. It gives such a feeling of connection and friendship across the miles from your generous spirit and everyone who comments.

    Every so often when I'm with friends or out and about the sense of isolation or pure temptation to buy more creeps up on me. So having a place where I can visit daily with others helps remind me that there are very good reasons to keep on track and that I am not alone in this.

    So, my first best way to stay on budget is to stay connected with you!

    Having our budget for the coming year estimated and extensively categorized on computer with monthly readouts and bar charts to consult gives great visibility and allows for readjustment if any bad habits start to emerge. (Buying take-away dinners is my big downfall whenever I'm tired)

    For the last few years we have also written everything we spend daily in a log book which lives on the kitchen bench, which each sunday we enter onto the computer budget and cross reference with bank statements. At first we would always find a shortfall compared with the bank but now we're pretty good at entering ALL our spending.

    DH also records daily how much power, water and electricity we use (we have two young adult daughters at home)so that all family members can discuss any blowouts and find ways to recoup. I have to admit that although this has produced some big savings I've probably blown it on take-away.

    I am a stay at home wife so I regard my "paid employment" or job description to be how I can make, grow and SAVE, so the weekly recording/tallying is my "boss" keeping an eye on me. How much I "earn" then, is up to me and the reward tends to keep me on budget.

    Another potential area for overspend is my daughters who are not yet independant financially.Although they both have made some savings they consume inordinate amounts of gas electricity and water at times.Now if I could only make an arranged marriage or two! LOL

    Promise I won't be so long winded next time.

    Regards, Marilyn.

  15. Lib, I agree, staying out of the shops, and ebay etc, is a great strategy.

    Flyfox, I was very interested in your comment. Thank you for sharing.

    Lightening, thank you. I try to stay consistent and stay on budget all year. Yes, things do fall apart at times but when they do I try to get back as soon as I can. I think it's important to not beat yourself up, love. Just accept what happens, but then do something about it. Don't just ignore it or wait till the next month to fix it. I think it's fine to relax a bit by living off your stockpile and using your budgeting food money on something else. Good luck.

    Hi Bella. Yes, I agree. If you need to buy certain things, the after Christmas sales are the best time. I have just remembered that I was going to buy a set of cotton sheets at the sales but I think I've missed them now. Do you know when they end?

    Lisa, thanks for sharing. It sounds like you're doing well now. Well done! : )

    Niki, I've checked out your post and have put a link to you in today's post on money.

    Yikes Maggie! Lucky you're on your feet again. Thanks for sharing your story. The envelopes are a great way of organising your money. It is worth a try.

    Hi Lyn, sounds like you've got yourself well and truly organised. Yes, I was very sad to hear about Heath Ledger'd death. He was a fine actor and from all reports, a thoroughly nice bloke.

    Rebekka, it sounds like you need to focus on one thing at a time. You probably need to work out your entire year's spending - all bills, you can't forget anything or you'll regret it. Work out a budget so you know how much spending money you have, and stick to that. Good luck, I know it's difficult but it will pay off.

    Hi Paula
    We've been very happy with ING. No problems at all so far. They also keep you informed with regular updates and emails.

    Hi Kristi, a very inteesting comment, thank you. I agree that eating from the stockpile is a great way to go. We are doing it at the monent too, it's helping us recover from our not so great January.

  16. Hi Marilyn

    Thank you for your comment. I read it out to Hanno and we were both impressed at your record keeping. Well done! I am happy to know that this blog is a mainstay for you and helps keep you on track. Keep up the good work and please comment again when you have time. I found this very interesting.


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