1 July 2008

Budgeting - new beginnings

Graphic from the Carl Larsen gallery

There have been a number of new readers commenting and emailing about starting a new simpler life, and I am starting another budgeting class at the Centre today, so I thought it was a good time to write about managing your money.

I've written about this a couple of times before but it's such an important part of this way of living that it needs to be highlighted often, if not for your benefit, then for mine. Like everyone else, I'm flawed and sometimes want things I don't need. Writing about budgeting and teaching my classes reminds me about the real value of money and how it can make or break us.

There is no doubt about it, you don't need a lot of money to live well. Hanno and I are testament to that but we still need to monitor what we do. We have ways of dealing with our money so we know how much we have, we know what we need to spend it on and we make sure we have enough left over to save or put aside for emergencies.

I know this seems strange but I know it to be true, most of us know how much we earn in a week but few of us have a realistic and accurate idea of how much we spend. If you're reading this as a guide to how to live well on less, then the first thing you need to do is to stop spending on wants and buy only needs. That means from this minute onwards, until you have a good understanding of your money situation. When you have worked out where your money is going and have a budget, you can relax more, but now you need to stop spending and try to change old habits.

Then I want you to track your spending. If you're like most of us you won't have much of an idea how much you spend each week, so I want you to find that out. Get yourself a little note book, if you're married, your partner needs one too, and every time you go out and buy anything, write it in the notebook. By "anything", I mean everything. Your list will look something like this:
Groceries $83.45
Fuel $50.00
Coffee $3.00
Magazine $7.50
Lunch $5.00
Fruit and veg $36.90
Coffee $3.00
Chewing gum $1.00
Newspaper $1.50
Postage stamp 50 cents
Dress $120.00
Shoes $125.00
Gift for friend $30.00
Bottle water $2.00
Apple 45 cents

Write down everything. This is very important because what you are doing is making a record for yourself of what you do with your money. If you "forget" or try to hide your spending you might as well stop doing this right now and think about your purpose. If your purpose is to change the way you live and move towards a more sustainable life, then even though this process may be painful, it needs to be done. If you are reading this but intend to continue your shopping sprees, then I'm not your girl, because I will require of you that you make a commitment to yourself. I want you to see what spending really is. I want you to have a better life. If you want that better life, where you spend less but feel more, where your happiness is not bought but developed within yourself and within your family, then read on. If you're not ready to make that commitment to change, then goodbye, it was nice knowing you.

Now is a good time to tell you that this life is not about deprivation or being miserable. Yes, it requires a period of readjustment and possibly that may be painful, especially if you are like I used to be and have been spending on whatever your heart desires. But that way of living is not sustainable unless you are wealthy, and even then it's stupid to spend just because you can. This way of living and spending allows you to have what it is you need to live well, but within a frugal framework that encourages thrift, reusing, recycling, cutting back, being kinder to our planet and being mindful of how you spend.

So far we've stopped spending on unnecessary items and started to track our spending. What next? I want you to think about the kind of life you want. What will make you happy? How does money fit into those ideas. If you're like most of us, you want to live in a nice home and be free of debt and all the worry that brings with it. If that is on your wish life, then you'll need to make up a budget. Yep, the "b" word, a word that used to make me cringe because I thought it was about restrictions. Now I know that a budget is simply a spending plan. It allows you to categorise your spending, keeping aside what you must have for payments, and working out for yourself what money you have - realistically have - to spend on other things. I will talk about making a budget tomorrow.

In the meantime, start your tracking. That will take all month but by then you'll have a very good idea of how you spend your money. You'll see patterns emerging that you didn't know were there and if you are like many of us, you'll be spending money on rubbish that you're not really aware of. I also want you to think about your life and how money impacts on it. When you don't have a lot of money it is vitally important to manage what you have well. I hope I can lead you on to that path, but it won't be easy. So be prepared for a rocky road before it gets better. If you're still with me, I'll see you tomorrow. :- )



  1. Morning Rhonda
    I love it when you cover budgeting. I have also done a budget, and to keep control of my spending I literally don't go to town. I can find an excuse to pop into town everyday but often it is for pointless odds and ends that I can manage without.
    Where I waste my most money is on Diesel. This is a bad habit on many levels. Not just my purse but also the environment. When I get bored at home, instead of finding a reason to get the kiddies into the car and drive somewhere I really ought to walk to the park with them or go for a walk as we live in the countryside. Its one of my bad habits that I keep slipping back into, and reading your post has given me another kick to stop doing it.
    Many thanks Rhonda
    Love as always Steph xx

  2. I'm looking forward to you covering this topic Rhonda. I really, really, really need it! I know it is going to be a hard road for me - retraining always is - but I'm mentally ready for it. I would like some advice on how to budget when you don't have a fixed weekly income coming in. It varies every week with the type of work we are in at the moment. Some good weeks and some bad.
    Rachel from NZ

  3. This is very timely for me Rhonda; I've lived within a budget for a long time now, its given me such a sense of freedom and such relief after so many years of fear around money.

    However, I just moved house and because of changes both in my living costs and my income I really need to redo my budget. I'll be following these posts with interest, I know it will help to have your ideas and encouragement. :)

  4. I'm eager to follow this too - I'm waiting to see if my work will allow me to go part time (the next step in my simple living quest). If they do then I'll need to adjust to live on 60% of my income which is scary!


  5. This is really on my mind at present. With the new child support laws coming into effect as of today... it looks like my income from that area will be dropping by around 8K a year. (I have 4 teenage boys... my ex husband's payment will be reduced from 1K to 400-and-something dollars a month... and when he and his wife have their new baby in Dec it'll go down to 300-and-something. Not happy! It won't even cover their food.)
    I've been doing some rearranging of where I allocate money (say goodbye to extra super payments and my mortgage will now take far more than the 10 years I had planned to pay it off.) So my challenge is to provide my family with the things they need and to still travel forward towards a debt-free life. Thank goodness I'm already well on the way, by baking, growing veggies and learning to sew. Thanks for the inspiration to keep plugging away!

  6. Hi Rhonda
    A reminder to follow the budget is always welcome.I have stopped buying most wants but food shopping is my downfall. If I am not very careful with menus and shopping lists I end up buying to much.
    Your blog help keep me on the path.

    Have a happy day.


  7. Hi there! I think this is the first time I've posted here, although I've been reading your blog for quite some time. I just wanted to say that you're an inspiration. Because of all the positive posts on your blog about living within a budget, living sustainably, and not being afraid to try something new, my family and I are now following a budget (and working our way out of debt-with me me having gone from full time to part time work(at a huge pay cut), I'm cooking from scratch and learning as I go, and for the first time today I did some canning! We've got 9 quart jars of pickles and 11 8 ounce jars of strawberry jam cooling as I type. I would never have had the courage to try this if it hadn't been for your blog. I can hardly wait to try something else.
    thanks for all that you do here, you're amazing.

  8. Hi Rhonda,
    Another great post!
    So "TRUE" tracking what you spend is the Key!
    We've had to really cut back this yr. DH was laid off from his job, and here(U.S.A.) Gas is $4.00 per gallon:o( And everything else going up,up,up!
    I hope your readers will hang in there and make the adjustments, it is a bit discouraging at first but once it becomes a lifesytle ,you just do it natural and don't give it 2nd thoughts!
    Have a Great wk.

  9. I am always happy to see how others live on little (since we are on a fixed income).

    We pay our heating bill on the budget plan, where it is the same for eleven months and then they adjust it (more or less) in the summer.

    Well, we just got the new amount and it is 40% more than we've been paying. This reminds me so much of the 1970s when everything kept going up in price very fast.

  10. Rachel,
    My family has lived on a varied income for 20 years, we are self employed, including a 6 month period of no income at all. The way we have managed is to only spend what we need to each week not what we can. That way you save money on the good weeks and the savings help fund the bad weeks. I hope this helps,

  11. Rhonda,

    Yikes the B- word..... looking forward to your next post. We have been trying to budget gas and my husband parking. We have a harder time with our groceries.

    I don't believe you can ever learn too much about saving money:)



  12. I need this so much! I will get a notebook out of my hiding place for them and use it moment by moment. I know it won't be easy for me, but then I have always known that what is the best for us is a little work and some planning. Thisis only thefirst stage of that planning. Thank you so much for your generosity of time and knowledge.
    The budget will not only help me trim my pocketbook and what comes and goes from there, but I will have the added benefit of losing some weight around my middle, because I will be more mindful of what I am buying to put in my mouth. (no more candies at work!)
    I'm going to start tomorrow morning. I won't start now, because I am not going to be spending anything more tonight. I am exhausted and not leaving my house! Thank you again!

  13. Hi Rhonda,
    I look forward to reading the rest of your posts on budgeting. Its something we can always use a refresher course on.
    Mrs B

  14. I don't mean to change the subject here, but I am so intrigued with your lifestyle. I also think I am a slow learner, and am just realizing what I am meant to do. I was going through some of your past blogs, especially on gardening. I just realized that if I play my cards right I have quite a bit of land here to plant a decent couple of gardens. I can use my front yard as well, with a low fence just to keep the dogs that are walking by from coming in and "watering" things for me. Thanks for making my brain kick into gear!

  15. Budgeting....yikes!
    I think that is alot of people's response to that word.
    I can't wait to read more!

  16. I so need these posts about budgeting. Every week our expenses seem to be increasing but the pay isn't. I am following along on my blog. :) Thank you for doing this!

  17. Hi Rhonda, I tried to find your email addy but couldn't so apologies if this comment doesn't belong here, although it is related.

    I was wondering how you cope with outside pressures to spend money? My sister-in-law is having a party for her 40th and the cost is £30 a head, half price for kids. So before drinks it'll cost us £75 which is more than our food budget for the week!!

    We said we couldn't afford to come for the meal but would come for drinks with her, but of course she is now insisting on paying for us, which we feel very uncomfortable with.

    How do you suggest we can approach situations such as this, when it seems impossible not to spend and stick to your budget??

    Perhaps this could be a topic for another day?

    Thanks, Kathryn x

  18. That's really the downside of living in a city for me: the shops everywhere that scream at you to buy something. Usually we just stay within our own neighbourhood that has mostly functional shops (groceries, garden supplies, pet shops, etc) and not much "fun shopping". If I go downtown, I usually fall for something I don't need.

    Christine from the NL

  19. I've started a budget. I know every day is a good day to start but I put it off until the first of the month. I do have a few large-ish goals including savings(!) and I know that even on my one income as a single parent, that I can live on a lot less than I make. Buying a house was a huge boost to my "I CAN do it" view and I know that living more responsibly will only increase that.

  20. I look forward every day to reading your posts and archive material Rhonda. It is quite simply inspiring. I'm glad you are writing about budgets. I've been trying to go to a simple life. I've got a garden growing like crazy, I'm making meals from scratch, baking bread, and a whole host of homemaking activities.

    In April I sat down and looked at all the ways we were bleeding money and started reining in the spending. Came up with an aggressive plan to be debt-free in 8 months.

    I've been struck by the saying "Life is what happens when you are making other plans". Aging parents with health problems have required lots of travel with hotel stays and with gas @$4.19/gallon it's pretty much ruined our budget. I don't know if you are planning on it, but perhaps you could end this series on budgets with some hints or tips on what to do when life happens.

    Regardless, I look forward to this series!


  21. This is how we started our first budget many years ago. My biggest frustration and obstacle was hubby not being able to remember how much and what he spent money on each day. LOL


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