I love the start of something new. A new book. A blank sheet of paper. An unopened packet of Tim Tams.
I like the idea of starting something fresh. A new financial year. A time to take stock of my income and expenses over the past twelve months in preparation of my tax return (my return is pretty simple and normally lodged before the end of July).
I keep pretty good records and know where most of my money is headed before it even comes into my account. I like to stay on top of things and I don't like outstanding bills. How do I do this?
Well for a long time I didn't. Money would come in. Money would go out. I lived week to week. I was not saving anything and really had no idea where my pay was going. It was a reality check one year when I sat down to do my tax return, saw my annual income and realised that I had nothing to show for it.
Something clicked. I knew I wanted to get control of my money I just wasn't sure how to go about it.
So I sat down with my bank and credit card statements and entered all the transactions into a spreadsheet. What I didn't know then is that I was on my way to creating the very first stages of… are you ready for it…a budget.
Now I am the sort of person who doesn't like to be ruled by anything, let alone a piece of paper. But there it was right in front of me… I could see that I had to make some changes. It was time to stop living pay to pay and plan. Time to stop worrying when the big bills come in because with a plan the funds would be available. I knew it all in theory, but I wasn't very good at making it happen.
There were a lot of areas that I could fine tune that would make a difference to my bottom line and perhaps I could even begin to save! Now it has become an annual process.
Every July I take a look at my fixed costs. I know what these are each month. I also know that with a few phone calls I could potentially reduce some of these expenses. Health insurance, house insurance, motor vehicle insurance. My phone and internet accounts are on contract but I have made a note in my diary to follow this up when the contracts expire.
Then I look into my variable costs. This includes how much I spend on groceries, entertainment, the children's sporting commitments, clothing, holidays, pets, motor vehicle running costs.
This is the area I can be smart and if I'm honest the area I have made the most changes. Don't get me wrong: there are very few things as a family we miss out on, but because when I know what is coming, I plan for it. For example in September we have cricket fees due for four children – because I knew this was coming I started planning (saving!) in June so by the time registration is due I am ready and it is not going to put a stress on other areas of the budget.
Which brings me to savings. As I have already mentioned, there was a time when I lived pay to pay – the mortgage was being paid, the bills were covered, the leftover was treated as that "leftovers". Should it happen (and touch wood it didn't) I was not prepared for a rainy day. My past ignorance now astounds me.
When I first started to budget part of my fixed expenses involved a column for savings. This was not negotiable. Slowly this started to build up and now if a situation arises I don't have to stress financially (at least in the short-term!).
So this weekend, after a hike through the hinterland, I plan on sitting down with my folders, statements and laptop to take stock of my 2017 financial plan and prepare another year's budget.