The road to Taking Control of your Finances starts with this…
Your dreams, your passions, your goals, all require money to attain them.
Therefore, if you want to achieve more, it seems like a pretty good idea to set up a simple system to make money work for you!
The amazing thing about life, and truly the most important thing about being human, comes down to one thing I believe. It comes down to the hopes and dreams we all share for the future…
What does that do with taking control of your finances you ask?
What if I told you that every dream, every hope, every desire and want, comes down to how much money you have and how you control your finances!
Money is simply a tool, much like the sword/plough was a tool in the middle-ages, used to take/till so that dreams could come true.
One of the biggest dreams in Australia and the US is to own your own home, to be able to have something and call it yours, so that you can sleep soundly at night and protect your family.
Another, especially within Australia, is to travel and to see the world, to see more and experience more…
All of this costs money, and it always has, but now we live in a time where we can accrue more money in a year than any of our predecessors or ancestors could even dream of.
We live in a pretty golden era, that is for sure, but with all that money, we can also lose sight of what we truly want, giving in to entertainment and gluttony.
We are only human after all, and not everyone looks to the future all the time. We either live in three phases, the past, the now or the future and the majority of us, based on multiple studies, live mostly thinking about the now and the past. We do not look forward all too often, due to everyday stresses and the fast pace of Western society.
Which is why we need to create a system that can keep you on track and create security around your future.
That system we call a budget!
But, budgeting can have bad connotations, it leaves a sour taste in our mouth, because generally we think budgets are restrictive. But like a bad diet, if you have a too restrictive budget, you will never be able to keep to it.
We are only human after all…
Hence, to set yourself up for success, the best way to start a budget is to look back into the past. Let me share with you a simple system I have created to budget, which takes a bit of effort and time to set up, but once it is done, you can set and forget or you can spend 10 minutes a week/fortnight if you want a bit more control completing it.
Step 1: Write down your Goals/Dreams
You need a reason to create a budget in the first place, if you want to achieve something, you need to write it down, speak to your partner about it and truly understand what you want.
Of course, this is easier said than done and I will be writing a later blog this year on how to ask the right questions to understand what you want and where you want to go.
Step 2: Look to the past and learn from it!
The scariest part about a budget is probably learning something about yourself. I realised pretty early on, after doing my first proper tax return, that I was a bit of a spender. I spent $10,000 in one year on eating out and take-away…
Now there is nothing wrong with that, except I had only earned $60,000 for the year, meaning I had spent almost 17% of my income on eating out!
I was amazed and felt a bit guilty, but I knew that I would never let my spending habits take control of me again.
It may be scary and you may not like what you find hidden in your bank statements, because it truly does reflect a little bit about yourself, but if you can get through that, you will also learn why a budget is really important too, as I did.
Therefore, we need to print out 3-6 months worth of bank statements and, using an excel spreadsheet, fill out what you have spent over the last 3-6 months.
To attain the excel spreadsheet I use, simply fill out the form below and put in the Subject: I want to Take Control of my Finances!
Once you have done this, you have done all the leg work needed, but it is not the hardest part, not by far.
Step 3: Work out how much your goal/dream is going to cost
Understanding where you want to be, now that you know where you are currently and where you have been in the past is paramount.
Therefore, a bit of research is generally needed, depending on what your goal or dream is.
Want to save a deposit and own a home, you need to understand how much you want to spend, you need to know what your partner is willing to contribute and how you will work together to do so. That is one example, but this is the fun part, talking about your goals and dreams with a partner or friend, researching and truly working towards what you want!
Step 4: Once you have a figure, you can work backwards.
Let’s say that you want to own a home and you want to spend the median house price in a suburb you want to live in, which comes to $700,000.
You want to have at least a 15-20% deposit, 20% means you will not need to pay lenders mortgage insurance, which is dead money anyhow.
Therefore, lets use the 20% deposit. Simple math says that $700,000 x 0.2 = $140,000
If you already have $20,000 in savings, you know that you will need to save $120,000.
Step 5: The final step, how much can you save and how quickly can you save it?
If you earn $80,000 per annum and your partner earns $60,000 per annum, after tax for simplicity sake.
You will need to look at your budget and work out, how much you are saving currently, let’s say currently it is not weekly or fortnightly and you just put money in the savings account when you can. Based on the 6 months, you have saved $10,000.
That means that you will need to save for 5 more years, before you can even think about going for a house. But you want to do it quicker, this is where things get hard and difficult conversations need to be had.
Rather than say you can be in your own home in five years, lets make it 2 years. That is $50,000 per annum, or $962 per week.
Your main living expenses come to $1,200 per week based on the budget you completed earlier, but you generally spend at least $1,108 per week on incidental things.
Hence why you have only been saving about $385 per week. ($10,000/26 weeks = $385)
Between you and your partner, you need to make up $577 per week in savings, which means you need to stop going out as much or going on less dates and sacrificing a little bit in the short term.
But that means you can still spend $531 per week on discretionary things, like eating out, dates, shopping etc.
Once you have worked out the figure you need, you need to simply create a savings account purely for that goal, whether that is a house as used in the example above, or for any other goal/dream and each week you take out that $962 out of your pay and put it into savings.
I would also highly suggest that you put the $531 per week in a different transaction account, with a new card, so that way you can split up your discretionary spending like eating out with your non-discretionary spending like bills and fuel.
And that is it, that is how you budget, of course it is a bit of time and effort. But if you truly want to take control of your finances and you truly want to achieve the dreams/goals in your life, it requires a little bit of time and effort.
Once you have done it though, it is so easy to either set and forget through creating a recurring transfer in your bank account or to sit down and do the transfers yourself once a week or fortnight depending on when you get paid.
Budgeting does not have to be about restricting yourself either, because truly you have control of when you want to achieve your goals/dreams by. Therefore, if you want to live it up a bit more, you just don’t save as quickly as the above example.
It all comes down to what you want and when you want it by!
Until next time,
Take Back Control
Why Budget??
Budgeting is way more than just excel spreadsheets and numbers.
Budgeting is a plan for the future, it is a way to make sure you are on track towards achieving your goals. The world opens up when you realise that you have the ability to pay off a loan quicker or save for a holiday.
Why Budget? Really, why wouldn’t you?
Why do we budget? Why plan or project out your income and expenses?
You would think it is a simple answer, to be better prepared and have some certainty around your finances, to not get yourself into debt when a big expense comes up.
However, you can also budget for multiple other reasons as well, such as trying to get ahead with savings or investing, opening up a business and even planning for your first child.
The reason budgeting is a “buzz” word right now, especially on TV shows like “The Morning Sunrise” or the “Today Show” is because we have all seen that the Reserve Bank of Australia has been increasing rates and people are starting to feel a slight pinch in their hip pocket.
Not to mention, inflation has been increasing prices of our foods and other general expenses, and our wages have remained relatively low.
Therefore, to project the next month of finances, or even twelve months for those who are a bit more advanced, would be pretty handy given everything that is happening.
Meaning that you will not fall short when at the grocery store, a day before pay day, wouldn’t that be nice? To not have to delve into your savings and to keep building your wealth, rather than chipping away at it and becoming even more depressed as your savings account dwindles.
You would rather see those savings increase wouldn’t you? You have travel plans or plans to invest in the future? You want to start a family and give your kids the best start in life? You need money to do all of that and more, therefore you have a reason to create a budget.
I remember learning pretty quickly that if I want to achieve my dreams and goals, the success of achieving them come down to how much cash I have sitting in the bank and how much I earned.
Therefore, I learnt pretty early on that I needed to create a budget, and to focus on the carrot, not the stick. Focus on the reward at the end of the day, rather than any dollar figures or massive expenses coming up.
You are more likely to stick to and achieve your budget if you work towards something, rather than just create a budget for the sake of it.
Therefore, the reason you should create a budget is because of a deeper reason, a massive goal that is going to take some effort and work to make happen.
No matter what it is, you will generally find that there is a dollar figure that will help you attain that goal as well, no matter how big or small it is.
You could start budgeting for a simple weekend get away with your partner, or to pay off a debt, like a car loan.
You need to imagine how it will feel to get away or to have no more debt or responsibility to pay back that loan, use that feeling as fuel to project out your finances and make it work.
The reason why I am going through this is because I want to focus on really pounding it into you that budgeting is not for doom and gloom, in fact, budgeting is for thinking bigger and for hoping for the future.
We budget so that way, we can live a life that we have a little certainty over and can give us a little bit more purpose around our work and of course around making extra money.
Budgeting is not hard either, it can be made simple, which is why I am going to be giving you a very simple way to budget in my next blog, where I will show you how I have budgeted to save for our first house, a few cars, a wedding, a second home and a Europe trip/multiple other holidays over the course of the last seven years.
All of which would not have happened unless I learned how to budget and stuck to it (which is always the hardest part), so make sure to look out for my next blog article and until next time,
Take Back Control
How to Make Sure Christmas Doesn’t Break the Bank!
If only you knew this before you went out and spent all of your money on gifts!
There is still time to get Christmas plans in place, get on the front foot and save some money this year to get ahead of the curve.
You don’t want to wake up with any hangovers, other than the one you may have from drinking a little too much egg nog.
T-B-C Special Christmas Edition
Here at Take Back Control, I have been running around, getting those last minute Christmas gifts and have almost finalised everything for what has to be the best time of year…
But, it can also be the most expensive time of year, if you let it. Which is why this special Christmas edition is going to focus around making sure that Christmas doesn’t put you out financially, leaving you reeling and feeling horrible when that Christmas hangover hits.
We have all been there before, when we wake up on the 2nd of January in the new year and think, wow, where did all my money go?
Or worse yet, you have to deal with paying back a heap of Buy-now Pay-later apps and personal loans, just to get those gifts that make people “feel” like you love them.
So, do you want to know the trick to not breaking the bank at Christmas time?
Ok, let’s see if I can save you a nasty Christmas hangover (and not the alcoholic kind)…
Tip 1: Communicate with Your Family and Friends
Probably the hardest task to do off the bat, because I believe in getting the hardest things done first, the rest is easy after this. You need to have a conversation with anyone who you will be getting gifts this year and having dinner’s, lunches, drinks with on Christmas day etc.
You need to talk to them about creating a budget and planning how much we will spend on gifts or food/drinks etc.
Without having this conversation, and coming to an agreeable amount, Christmas can be difficult.
You need to make sure you ask first, and don’t just tell people what to do, which means getting in early, before people have brought gifts.
Asking simple questions like;
How much are you wanting to spend on gifts for Christmas?
How are we pitching in for Christmas Lunch/Dinner?
Should we just bring our own food and drinks? (Probably the best way to control your own spend)
The best way to do this is through talking with the host of Christmas this year or making a group chat. Having a family group chat can be great for many things, we have one with just my brothers in it, where we ask questions about what is everyone getting for mum and dad etc.
Coming together and discussing it, you learn more about each other and can become even closer because of it.
Tip 2 - Bad/Dirty Santa/White elephant- The game that will save you $$$
The best way to save money I have found, which has become a bit of a family tradition for us over the last three to four years, is playing a game we call Bad Santa Kris Kringle. There are many other names for it, but I will leave a link below for the description of how to play the game.
In fact, our friends have even suggested it this year, which means rather buying a $30-$50 gift for each person, costing potentially $120 to $200 or more, you can buy one gift, have fun playing the game and enjoy each others company even more.
Let’s quickly do the math, say you have a family of ten, a group of friends that number as 8, that is potentially 16 people that you will need to buy for. Say you have a budget of $30, that is still $480 of gifts you have to buy, but most of the time if we are honest, it is more than $30. $50-$100 each sounds probably about right these days, which could make it a very expensive Christmas ($800-$1,600 just on gifts alone).
Suggesting this to generally the mother, or mother-in-law, because we all know who is boss during Christmas time, will leave you with the highest chance of success for the family.
My friends who suggested it simply created a group chat labelled ‘Friendsmas’ and we even chose a theme for the gift buying.
The game is even fun with kids, but of course, we all know Santa is coming for the kiddos.
Tip 3 - Create a Budget!!
Pure and simply, making sure that everyone is on the same page and knows what the maximum to spend is on gifts and food is pivotal to not breaking the bank over the Christmas period.
My brothers all agreed last week we wouldn’t spend more than $40 on each other this year, and that goes for the whole family now, as cost of living has really hit a few of us in the family.
We are accepting and feel better for communicating it with each other, not to mention, it has brought us closer together, without judgement of one another’s situations.
We are all bringing our own food to our little Christmas get away to Phillip Island for the Harvey family and have delegated roles and spend to everyone for our Christmas Eve dinner for the Perryman/Joyce family.
Tip 4 - Kids Gifts
The hardest part about Christmas has to be what Santa gets the kids for Christmas, and can definitely blow out to be the most expensive.
Setting expectations early is pretty important, as kids will always want more and more. I still remember wanting the most expensive thing in store, until I learned about the value of money.
If you begin buying them hundreds of dollars worth of gifts from a young age, they will always expect more. Therefore, one neat little trick that I remember from my parents is saying that Santa only gives you one gift. Every boy and girl only gets the one gift and of course you can base it around whether the child has been naughty or nice, but that is not the best way to go about it.
Because more than likely you will find Harry, the meanest kid in the school, gets the best presents and then your child will look at their gift and wonder what they did wrong.
Santa could also just get them something small, from the North Pole or something that is truly memorable and magical. You can leave the “big gifts” to those that are from “Mummy and Daddy” or “Mummy and Mummy” etc.
Instead, start teaching your children about the value of family, connections, experiences and place a lower value on material goods. You need to do this from a very young age, and you yourself need to lead by example. If you have all the latest gadgets and the impeccable furniture, your kid will want that too, but even more than that.
Maybe even start getting your children to save up for Christmas if they truly want something big and expensive and tell them you will pay the other half, what a great way to teach the kids the value of money and the time it takes to accrue it.
Tip 5 - Make a list and check it twice!!
I mean the big man himself is a list person, and if it works for Santa, why can’t it work for you too. You need to sit down, write down all the people/bad santa gifts that you are going to buy for and start brain-storming ideas.
Why waste all the time looking around the shops and dealing with the crazed people rushing about, when you can get in, get the thing you have already put down on paper and get out!!
If you are to do none of the above this Christmas, at least do this one, because if you don’t have a plan, you plan to fail!
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Hopefully you can use some of the above to save some $$$ over the Christmas season, even if it is just one of the tips, I am sure it will help.
We have one more blog before the end of the year, maybe two more depending on how much time I can find during the holiday rush.
Therefore, if you don’t read another blog by the end of the year, I wish you all a very Merry Christmas and Happy New Year!
From my family to yours, have a safe festive season.
With love,
Joel Perryman
Take Back Control
![You Could Be Paying $697 More Per Month On Your Mortgage!! Budget Series [Special]](https://images.squarespace-cdn.com/content/v1/615a820783700f2629aaa7f4/1651705840532-0H7HF1C6DH9T8D7A00DH/mortgagerates.increasing.jpg)
You Could Be Paying $697 More Per Month On Your Mortgage!! Budget Series [Special]
The cash rate has finally been raised, which means, the variable rate on your mortgage is going to be raised as well!
Time to take back control by understanding just how much you will need to pay within a years time in extra interest per month.
The Reserve Bank of Australia (RBA) have finally increased the cash rate after 12 years of decreases, going from 0.1 and lifting 0.25 bps to 0.35.
Not only that, but Governor Phillip Lowe has flagged that there will be more than one rate rise this year, stating in the press conference on Tuesday, 03 May, “Given the outlook for the economy and inflation, further normalisation of interest rates will be required.” [1]
The reasoning behind the uplift in the cash rate? Inflation of course, which hit 5.1% year on year. Which is the highest it has been since September 2008. [2]
The positives that came out of the report is that it looks like wages are also steadily increasing, although the wage report has not been released as of yet, Governor Phillip Lowe has released that based on liaising with business associates and gathering data from local companies, the wage growth is definitely there.
What does this mean for everyday people like you and I?
It means we will need to adjust our budget, as mortgage costs will increase along with other cost of living, with inflation continuing to increase.
And it means as inflation has increased, adding on to the fact the employment rate is down to 4.0%, [3] it might also be time to start looking to ask your employer for a wage increase.
Today, I won’t be going through how you can attain a wage increase, however, I will be giving you a few figures to think about for when you do want to add the extra cost on to your bottom line for your budget.
Here are the things you need to ask yourself;
You need to ask, how much more interest will I need to pay? Thanks to the rate rise.
How much can rates increase over the next 12 months? How do I plan for further rate rises (some banks are estimating to see the cash rate at a normalised 2.0% in 12 months time.)
Let’s start with, How much more interest you will need to pay?
Based on the average variable rate of 2.71% [4], as of May 17-22nd, you will see a interest rate increase of 0.25% to 2.96%.
As well as the average home loan in Australia being $599,922 according to the Australian Bureau of Statistics (ABS) in March of 2022. [5]
The average monthly repayments on a $599,992 loan over 30 years will be $2,437 per month, now what happens when interest rates increase by 0.25%?
The interest rate repayments would increase by $80 per month to $2,517 per month, which probably doesn’t seem to bad.
Does your loan work out to be bigger than the average, or smaller? That is ok, lets work out some quick numbers for you;
Home loan size: $300,000
Avg. Var. rate and repayments: 2.71%, $1,219 p.m
New Rate and Repayments: 2.96%, $1,259 p.m ($40 increase)
Home loan size: $400,000
Avg. Var. rate and repayments: 2.71%, $1,625 p.m
New Rate and Repayments: 2.96%, $1,678 p.m ($54 increase)
Home loan size: $500,000
Avg. Var. rate and repayments: 2.71%, $2,031 p.m
New Rate and Repayments: 2.96%, $2,098 p.m ($67 increase)
Home loan size: $700,000
Avg. Var. rate and repayments: 2.71%, $2,843 p.m
New Rate and Repayments: 2.96%, $2,937 p.m ($94 increase)
Want to know what your mortgage repayments will be exactly and how the interest rate will affect it, check out the CommBank repayment calculator.
What about the further rate rises that have been flagged by the Governor himself?
Let’s just assume that the cash rate will increase to 2.0% as the big four banks are assuming over the next 12 months, how much does that add to your costs?
Home loan size: $300,000
New Rate and Repayments: 4.71%, $1,558 p.m ($340 increase)
Home loan size: $400,000
New Rate and Repayments: 4.71%, $2,077 p.m ($453 increase)
Home loan size: $500,000
New Rate and Repayments: 4.71%, $2.597 p.m ($566 increase)
Home loan size: $600,000 (Average Aus home loan)
New Rate and Repayments: 4.71%, $3,116 p.m ($679 increase)
Home loan size: $700,000
New Rate and Repayments: 4.71%, $3,653 p.m ($792 increase)
Let me just let all those numbers sink in…
For the average home owner, you are looking at an increase in mortgage repayments of $679 per month over the next year.
Based on the RBA “normalising” the cash rate, and what the big four banks and the markets are assuming will need to be done to reign inflation in.
What can you do from here?
Now you know the facts, it is time to plan ahead and truly make a difference to your lives now by doubling down on mortgage repayments, maybe you want to reduce the shock of rate increases by simply paying down what you expect to within a years time.
The other thing you could be doing right now is start looking at what you are paying with regards to your variable rate and shop around. See what else is on offer out there, you will be surprised at home many low interest banks there are at the moment, quoting 2.19% and lower.
Just be careful though, as these low interest banks may also increase their interest rates a lot faster than the other banks. It would pay to see whether they follow in line with the cash rate or increase it by more. (Most banks will be increasing their variable rate by the end of May.)
Hopefully the above can give you some idea of where you could be at with regards to mortgage repayments in the future, of course, the above may not come about or it could be worse. So don’t take my word for it, but it pays to be aware of what the changes mean though and to help you re-adjust your budget.
Until next time,
Take Back Control
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How to Stick To Your Budget: Budget Series-part Two
Illustration by Lucia Pham.
Budgeting is not easy, it takes hard work and it is boring. However a true budget can set you FREE.
Have you created your budget? If not, and you need help, make sure to check out part one of the series by clicking HERE!
Make your budget and then come back to this article to read how to stick to your budget!!
Made budgets before, but been unable to stick to them?
If you have struggled to keep to a budget, fear not, you are not alone, my wife and I sometimes go well over our budget every three to four months as well. Firstly, I want to make this clear, there is no shame in going over your budget, do not feel guilty about it, it has happened and you can do nothing about it. The past is the past, the only thing we can take from it, is to learn from it!
Feelings of shame and guilt is going to help no one, in fact, the more shame and guilt you feel, the more you may sabotage yourself moving forward. I have seen it all the time when clients put themselves on “diets” when trying to lose weight, over the last ten years as a coach and personal trainer.
A budget is much like putting yourself on a diet for most people, but it does not have to be that way, because most studies on diets, and budgeting in fact, deem that it does not work when you try restrict yourself excessively.
In fact, I don’t believe that you should be restricting yourself when you go on a budget, which is where most people make the first mistake!
As soon as you look to making restrictions on yourself and your lifestyle, it is just human nature for you to follow along for a short period of time, but life will happen and it is bound to blow out disproportionally soon enough. Therefore, to make sure your budget is set up for success you need to follow along on these basic guidelines when setting up your budget;
Once you have completed a full audit of your bank statements spending over the last 3-6 months, ask yourself, are you happy with where you are at financially? Happy with the amount of savings you are making (surplus cash)? And happy with your ability to pay down debt?
If you are happy, that is great, continue along with what you are doing and just review your spending every month to two months to make sure you are still on track.
If you are not, however, the first thing you would need to do is set yourself a goal. Make it a goal that is going to improve your life significantly, something that will truly make you sacrifice a little in the short term, for long term gain.
It could be saving for a house deposit (that is why my wife and I started budgeting), it could be saving for a round the world trip for a year, it could be saving to get a ticket to Elon Musk’s first inter-planetary trip and colonisation to Mars!! (Apparently will be roughly $100,000-120,000US.)
Whatever it is, make it something that is going to be worthwhile for you, your partner if you have one, or your dog, whatever your situation is.
Got your goal? Great, now it is time to do what I like to call, reverse engineer the goal, by breaking it down into small and manageable steps!!
Want a $100,000 home deposit? Want to be able to get into your first home in two years time?
Firstly, you need to work out whether you can do that or not with the current budget you have just created…
Simple math makes out that you need to be saving $50,000 per year, or $962 per week. Does your budget say that it is possible?
If not, don’t get disheartened, there is three things that you can do, make a few sacrifices if you are not far off saving that amount each week and just make it work. Or, if you are too far off, say you are $500 per week off, you will need to make the timeline a bit more achievable.
By making it more achievable, you will set yourself up for success, rather than set yourself up for failure. The worst thing you can do is drastically change your life and go to the extreme where you are spending absolutely nothing at all, remember how I said a lot of studies say that most “diets” and budgets fail. That is why!!
So, lets say that you are saving roughly $400 per week at the moment, which is the most you can do. That works out to be $20,800 per annum. Which means, your two year timeline is not really achievable, but a five or six year timeline might be a bit more realistic.
You just need to do the math and break it down into bite size chunks, think in terms of weekly or fortnightly savings goals to get you to the bigger savings target at the end.
Think about the SMARTER goals I mentioned in part one of the budget series!
Not happy with the timeline, that is ok, because you don’t have to actually just restrict spending, you can also work on Earning More Money!!
One thing my wife and I did to save for our house that a lot of people don’t really know too much about, is that we decided that we wanted to build our first home and wanted to do it within two years. However, what we were earning was not really enough, so instead of just saying oh well, its not feasible, we will just lengthen our timeline…
We decided to sacrifice a little bit more and worked harder to earn more money for eighteen months. We had to get a deposit together of roughly $90,000 to build our first home, we had $18,000 between us at the time. Which meant we needed $50,000 saved in just over eighteen months. (First home owners grant was $10,000 and we got a small loan from Liv’s parents, which we paid off before we moved into our home)
Our savings rate was just over $640 per week that we needed. And we made it happen!!
We scrimped and scraped, we worked harder, built up side hustles and earnt more money that way as well.
The one thing that I hope you take out of this, no matter how hopeless it feels, there is always more you can do, you don’t just have to restrict spending.
Which brings me to the the Most Important part of achieving your goal and sticking to your budget, it comes down to Pure OPTIMISM and HOPE for the Future!
You cannot go out of your way to make life harder right now, if you do not have any belief in being able to achieve what you want to. It is humanly not possible for you to make sacrifices and stick to them, if you do not believe that what you are doing is going to work.
That is why you need to set a savings goal that is achievable, you need to be able to hit that savings goal for a long time and you need to make sure that you are 100% invested in making your DREAM a REALITY!
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Budgeting is hard, life is hard too sometimes, but being able to have a budget that thinks of all the things that might crop up, such as car accidents and other emergencies, holidays, bills, rent/mortgages, groceries, birthdays/gift giving, charity, pets/vet bills, insurances, rates…
Having a budget is not made to reduce your spending or restrict your lifestyle, it is made to bring you FREEDOM in your life. A budget is made to give you the life you want!
A true budget will make your life easy and will set you up for success in anything you would want to achieve. If you get the budget right, your 30, 40, 50 and especially 60 year old self is going to love you for it so much more.
If you can make a budget that you can stick to, you will be able to save and achieve your goals in the long run! And I reckon it is one of the first major steps towards Taking Back Control of your Wealth, your Health and your Life!
Until next time,
Take Back Control
How to Take Control of Your Money: Budgeting Series Pt One
Welcome to the first instalment of the budgeting series, whereby Joel will be taking you through how he started budgeting and the five steps he uses to keep on top of his finances.
Also find one of the budgeting tools/forms he uses to keep track of his spending.
The only way you can Take Control of your money habits and spending/saving behaviours is to first understand what you are doing right now and have done in the past.
The best way to do this is to look at the numbers over the last three to six months, because numbers never lie, when memory and previous experience can be muddled.
I have found over the last ten years owning a sole trader business and having to do all the books myself, that you will be surprised, even ten years in, with your actions when it comes to spending.
Step 1: Do an audit of all your accounts.
The most important aspect of planning for a budget is to understand what you are doing right now and in the past, therefore, doing a full scale audit is really important.
Although it is the most important part, it is also the most boring for most people and why most people will always struggle when it comes to budgeting.
To complete an audit, you need to gather up the last three to six months of bank statements from all accounts, including your partners if you have one (always work with a budget as a team, which means there is no “I” in team").
Create the categories for each month of where you will be inputting the spend, an example of this would be groceries, take-out, mortgage/rent, kids schooling, self-education… The list can be as long as you make it, but I will provide a list I use of my own which is super comprehensive at the end of this article that you can look out for.
Understand how you work, do you need a highlighter to cross off all the transactions you have inputted? Do you need multiple highlighters for each category? Are you like me and would rather input as you go through each line of transactions? By being able to understand what works for you, it will be quicker and more efficient!
Input all transactions, no matter how tiny they are, it is imperative that you do this, even if it is just a $1 chocolate bar from the supermarket.
Lastly, you need to make sure each category is tallied up, in this I use excel. Which has functions such as Sum that will calculate all the totals up for you. Excel makes life a lot easier and quicker to create a budget and to track your spending, I would highly recommend it!
Step 2: Decide on what you want to do with the information now gathered!!
Almost as important as step one is working out what to do with the information you have organised. Have you got a surplus of cash/savings at the end of each month? Do you spend more money than you make?
Or do you just break-even?
Step two is where you can have all the fun, or it could be where you need to have tough conversations with either yourself or your partner. If you have just broken even, are you content with that?
Do you want to build up a cash reserve for emergencies? Do you want to save for a house? Having a child? Retirement?
Do you just want to be able to get away and see the world?
I can guarantee you, everything you ever dreamed of doing, all of it comes down to money and being able to use money wisely. If you have a goal you want to achieve, if you have something you want to do, you will need to have cash to do it. That is why, it is a great idea to talk to a coach or a Financial planner, who can help you with drawing out what you truly want, how to make your life better.
You can talk to friends and family, however, having someone who is not bias is an extremely important asset to have, someone who only has your best interest at heart.
One thing I have learnt, as much as you love friends and family, they do not always have your best interest at heart. Not out of malice or evil intent, in fact it is because they love you that they can sometimes offer bad advice.
Step 3: Now you have decided what you want, set REALISTIC goals!!
Setting realistic goals is paramount to budgeting success, you cannot maintain a budget if you blow it every month. You will just get disheartened and will dread reviewing your numbers every month. (Step four by the way.)
To do this, you need to look at creating a SMARTER goal (Specific, Measurable, Achievable, Relevant, Timely, Evaluate and Review) surrounding lifestyle, finance, education, career and relationships. I would suggest choosing one category to work on first, do not overwhelm yourself. Stick to one thing only until you get better at it!
Of course, you may not achieve said goals all the time, however just by purely setting the goals, you will at least be moving towards the life you want.
Step 4: Commit to reviewing your budget and goals every month!
Once you start on this path of Taking Back Control of your money, the most important aspect of the journey is to continue it. Between the age of 25 to 28 years old, our spending habits and savings rate has changed dramatically. We are constantly changing our budget and our numbers, therefore, you need to know them to be able to change them and keep up with the consistent changes.
If you are not good with finances, that is ok, you can ask your partner to do it, like I do for my wife. However, you need to make sure that you are open and transparent with the financial decisions. Otherwise, you could always hire a professional to help you with regards to this as well, such as a Financial Planner or coach.
Step 5: Take Action
Lastly, but definitely not least, YOU NEED TO TAKE ACTION!
There is no way around it, you need to put in the work if you want to reap rewards, you can outsource if it is not your strong point, but you will still need to do some groundwork.
I hope that the above will help you on your journey to taking back control of your finances,
Please see below the budget planner, and if you would like a copy, just submit your details below,
Until next time,
Take Back Control
Submit Your Details below to get access to a FREE Budget Planner, Fully Editable like the one you see above!
Holiday Budget: We just got back from our Honey Moon
A perfect view from atop a hill on Hamilton island, about halfway through our honeymoon.
Budgeting for holidays is a skill I still haven’t been able to master as of yet, however, it is a skill that my wife and I are getting better at.
Still went over the budget by about $1,000 though!
I have been a bit quiet over the last few weeks because my wife and I were finally able to go on our honeymoon, roughly a year after getting married.
Now that we are back, I wanted to go through how much it cost us through a day by day breakdown to travel to Queensland in 2022.
Which will hopefully help anyone who may be looking to travel to the Northern part of Queensland, which is an absolute spectacular and majestic part of the world that I would highly recommend for anyone to go to.
We splurged a bit more, due to the fact it was our honeymoon, so you could definitely do it a lot cheaper if you wanted to. However, we also could have spent a heap more as well…
Day 0 (A prelude before going away): Crown Promenade and Delta Concert
Accommodation- Crown 1 night= $378 (not worth the money in the end)
Delta Concert = $300
Food and Drink = $38
Total = $716
Let’s start with Day 1: Flights to Proserpine from Melbourne
Mantra Club Croc resort, just outside of Airlie Beach. Booked through Redeem Vacations.
Jet Star flights for my wife and I to = $299.92
Shuttle Bus to Accommodation = $44
Accommodation for 4 nights = $120 (We got a voucher through our photo booth and Redeem vacations)
Food and drink = $65
Groceries = $30.45
Taxi ride = $10.50
Total = $569.87
Day 2: Ocean Rafting and Snorkelling adventure
Standing on Whitehaven Beach, which is a pure wonder of the world, with the whitest sands and bluest waters!
Adventure = $278
Food and Drink = $88
Total = $366
Day 3: Day in Airlie Beach and Relax Day
Airlie Beach Lagoon, public swimming area, with waters just as beautiful as its bay.
Food and Drink = $51.50
Total = $51.50
Day 4: Tongarra Sailing and Snorkelling Adventure
Tongarra Sailing and Snorkelling adventure, heading back in with a sunset sail at Airlie beach.
Adventure = $300
Food and Drink = $53.50
Total = $353.5
Day 5: Hamilton Island (Loads of Free water sports/activities)
Sunset on Hamilton island was pure bliss and left us breathless from the beauty. The array of colours was amazing and the image above does not do it justice!
Taxi Ride- $11.10
Ferry (returns) = $240.50
Accommodation for 1 night at Reef View Hotel = $430
Food and Drinks = $77.7
Total = $759.30
Day 6: Car hire and travel to Townsville/Magnetic Island
Car Hire for 6 days (we also went above the KM limit) = $970
Accommodation for 1 night at the Rambutan = $143.7
Food and Drinks = $44.3
Groceries = $19.70
Total = $1,177.30
Day 7: Magnetic Island and Palm Cove
Unfortunately our only day of bad weather where it rained all morning was on Magnetic Island.
Ferry trip to Magnetic Island = $56.8
Bus trip = $6.70
Palm Cove Accommodation for 2 nights = $535
Food and Drinks = $62.50
Groceries = $30.50
Petrol = $70.51
Total = $762.01
Day 8: Palm Cove Markets and Relax Day
Peppers resort Palm Cove, where we stayed at an apartment called Palm Cove Paradise for couples.
Markets = $45.6
Food and Drinks = $84.80
Total = $130.40
Day 9: Daintree Rainforest and Port Douglas
The Daintree Rainforest, where the Rainforest meets the beach. Pure amazing sights and wonder!
Mossman Gorge Bus fare = $26
Ferry Ride over Daintree river return = $39
Daintree Discovery Centre = $71
Ice Cream = $11.10
Food and Drinks = $24.5
Groceries = $12.45
Accommodation at the Ramada for 1 night = $170.10
Total = $354.15
Day 10: SkyRail Daintree Rainforest and Cairns
Karanda Train and Skyrail = $238
Karanda markets = $27.65
Cairns Accommodation for 2 nights= $216
Food and Drinks = $55.60
Groceries = $21.35
Total = $558.65
Day 11: Atherton Tablelands and Waterfall Hunting
The Milla Milla Waterfall, has to be some of the freshest waters and amazing swimming spots we have been to!
Crystal Cave and Geode = $90
Petrol = $55.45
Food and Drinks = $32.10
Total = $177.55
Day 12: Cairns and Flight Home
Ice cream = $18.50
Food and drinks = $28.5
Petrol = $50.45
Long term Car park = $120
Flight Home = $315.20
Total = $532.65
Which concludes the holiday and brings us to the grand total of (drum roll please)…
Grand Total = $6,508.88
When I look back on the holiday and see the grand total, I was a little surprised, I thought we had spent around $5,500 or so.
However, we had also brought a few things like some accommodation and flights before we left, so I may have forgotten about a few of those that definitely add up over time.
Like I said above though, you can definitely do a lot of what we did for much cheaper, but we wanted to splurge a bit more for our honeymoon and were willing to do so.
Of course, we didn’t spend all that much on drinks or eating out, as we made our own lunch and took our own breakfast majority of the time.
You could definitely see how we could have splurged a lot more as well.
But hopefully, if you are planning on a trip to Northern Queensland, this has helped you and now you can budget for yourself and your family before going up.
Until next Time,
Take Back Control