So you've identified all your income, expenses and you've determined and documented
how much your life style costs you. Congratulations, you have
established a blue print of where your money is being spent. No more
wondering where your money goes to every month, you now have the
answer.
But life likes to throw us curve balls and no
matter how well we predict potential costs, our lives and circumstances
may change. You may move to a new job/role and your income changes, you
have an accident and need to purchase a new car, you decided to renovate
that old bathroom, you start a business and is in its infant stages and
have no financial backing therefore all costs are coming out of your
own pocket, a medical situation occurs in your household and results in a
large medical bill you need to pay for. Whatever those changes are you
need to update your budget or blue print to reflect those changes.
So
how do you track those changes onto your budget? As I mentioned
previously a budget is only as good as the amount of detail it contains
and needs to be reviewed regularly. I also mentioned in our
household we review our budget on a weekly basis. We review what we
spent the previous week, we do this using our online banking tools. We
always opt to pay for all transactions electronically so we don't need to remember every exchange of money, our banks have done that work for
us. So every week we review and document the transaction into our
budget.
For every month we create a new spreadsheet (worksheet) with the same
categories and items as we identified at the start of the budget process
but we keep items blank until that transaction occurs. For example for
the Car Liabilities category insurance, registration, green slip, pink
slip and servicing would be empty until renewal period approaches.
However a category that usually has a transaction every month (at least
in our household) are Groceries, Transport, Entertainment and items such
as petrol, health insurance, mortgage repayments etc.
By
regularly tracking what you have spent and comparing it to the budget
you created at the start will allows you to monitor whether or not you
are sticking to you budget, identify any regular spending you didn't
account for at the start therefore may need to update your original
budget and ultimately know where your money is going. I challenge you to really start understanding and tracking your spending via a budget and soon you'll notice how much better you get at saving it. Good luck and if you have any questions about any of the information I've provided, if you're stuck with putting your budget together and would like some help or would like an electronic spreadsheet / template to help you with your budget feel free to email me on gen.y.mum@gmail.com
