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:
MONDAY
Groceries $83.45
Fuel $50.00
Coffee $3.00
Magazine $7.50
Lunch $5.00
TUESDAY
Fruit and veg $36.90
Coffee $3.00
Chewing gum $1.00
Newspaper $1.50
Postage stamp 50 cents
WEDNESDAY
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. :- )