Detailing A Simple Life - our budget


I have been getting more and more emails asking for assistance in the areas of simple living, home management and budgeting. It gives me great joy to know that my writing is actually assisting you! Please keep the emails coming. I try and address them with detailed responses, just be aware that sometimes it takes me a couple of days to get through them all. I will also try and give more specific details in each of the posts I create.


In return, I ask that if you gain some benefit from my writing you put a link on your blog or send all your friends a link to the site and ask them to tell their friends!


At the moment I have turned my mind towards tightening our budget. I think it is because of all the news coverage about the current financial climate. I really feel for small businesses who are the first to suffer when there is less work around for people. It is okay for us to say we will cut out non-essentials like coffees, magazines, restaurant meals etc - but what if you are the owner of the restaurant, coffee shop or news agent who has to put food on your table. It really is hard, because the truth is, that in difficult times it becomes a case of 'everyman for themselves', meaning, if I don't have extra money to spend I am not going to eat at your cafe. The good thing is that the economy works in cycles, we just need to ride out this downturn.


So if I can't help you by spending money at your cafe, the only thing I can do is, as I have said before, swap you spinach for eggs, or jam for beans. This is the great Australian way - swapping the pickles over the back fence. We just need to re-establish these traditions.


I have just re-done our family budget again. Partly because I want to reduce it and partly because it changes every season because of changes to our entertainment and eating habits.


As my regular readers know I am an envelope girl. I have little bags for each area where money is required and withdraw the correct denominations of cash each week. Recently I have changed this from plastic bags to a little mini accordion file with labelled compartments.


I include not only amounts that I know we spend each week like food, fuel, entertainment but also include seasonal categories like clothing, holidays, Christmas birthdays. Whenever we need something I just go to that category and pull out the cash. This really works for us and it gives me tremendous joy knowing that we always have the money there for things that we need or if we want to go and do something as a family. There are from time to time expenses that I haven't thought of but because I have been doing it for many years I have it pretty well worked out.


Hubbie needed new shoes today ( I have begged him for weeks to replace his ones that were just about needing sticky tape!) and he was able to go and get the cash out of the folder. Number One son has a birthday party to go to on Saturday and I know that there is money there for a present. If the kids bring home a school excursion note or we want to hire a movie or go out for tea, the money is there. We don't have to worry about the guilt of knowing that we can't afford it but stick it on the credit card anyway to worry about "later".


We now allocate $365 per week, down from $449. The categories are:

Fuel

Holidays

Christmas

Birthdays

Groceries

Clothing/ hair

boat fuel

school

entertainment

pocket money

sanity money

kids banking.


This is separate to the amount I have for bills and savings. I always take savings out first and have a bills amount worked out by adding them all up over the year and dividing by 52.

Notes:

The kids pocket money is $5 per week. They use it to buy treats and save up for things.

The sanity money is $10 each that Hubbie and I have that we just blow or save or whatever we feel like. I allocate $150 per week for groceries but never spend that much. I usually spend under $100. I collect the extra money and blow it in holiday times or when we have visitors or at Christmas time etc. Sometimes I have to buy things out of that amount if they breakdown, like a toaster or something.

I love having Christmas already paid for. I love having our yearly resort holiday already paid for. There is great peace.


Having cash on hand is extremely powerful. I love the concept of poverty by choice. I like shopping knowing that I have a set amount in my pocket. It makes me really consider each purchase.


Are you a cash person ? Or do you have some other fabulous way of staying within your budget ? Do share !

9 comments:

Michelle said...

I am seriously impressed that you feed your family of 4 on less than $100 per week!! We are a family of 3 adults and I spend between $120-$140, this is down form $180-$200!!
I have found that while I am establishing my veg garden I am spending more on garden stuff but hopefully I will save money in the long run when the garden is producing well.
I have a detailed budget that I am pretty good at sticking to with my only downfall being my op shop addiction.
I only go to the atm once a month for cash and put it into my baggies. If I run out of cash before I run out of month then that is just tough luck, I won't go get more cash. I track everything I spend so I can check to see where I have overspent.
I am very glad I don't have a mortgage anymore as I think we are headed for very tough times indeed!
Cheers, Michelle

libby said...

We have just gone over to a cash budget about 2 months ago. It's been tough getting used to but now most categories are starting to build up in funds. It's definitely been the first time I've managed to stick to our budget.

Libby

libby said...

Oops, I thought I had already linked to your page from my blog but upon checking see that I hadn't. I have now :-).

Libby

xo.sorcha.ox said...

My partner and I manage to spend around $120 per week on groceries - and that's just for the two of us & a dog! It may seem hefty but we have been unable to get it below that since moving. When we were living in the city we would only spend around $90 per week on groceries, but prices here in the rural centres can be twice to three times as much than what they are in the city, especially the "fresh" foods. And I'm vegetarian, so it always surprises me how much we spend. When we finally purchase a house (which we hope to do before the end of the year) we will try to grow our own fruit and vegetables, but in the meantime we buy from the supermarket (there are no growers' markets here). I'm also not a cash person - If I have cash lying around I am more likely to spend it! So I keep separate bank accounts and transfer the money I dont need to one that is not attached to my debit card. That way I cannot be tempted! :)
~ S.

white_lilly said...

You have some very good advice and ideas to take note of. It is amazing how much you can live on if you put your mind to it, there are too many choices and varieties of food items out there but if you go back to basics and live simply you can save a lot of money. I have a small business and things are a bit tough at the moment,I can cut down on my food bill by having my veggie patch and we also farm our own meat.
I like the idea of the mini accordion file with labeled compartments to allocate monies to. Something to try! :)

The Old Dairy said...

What a great idea and post. I am a cash person we don't have a credit card. We own our own bussiness and I get wage of $400 aweek. This is for food clothes ect. for a family of 7.I do not pay for petrol or electricity out of this though.This money is for general house keeping. I like your idea of envelopes for every-thing, I am going to give this a go. As I am always running short of money by the end of the week...
Mandy

Sandra said...

Thank you for this, I love your piece on routine and I am going to give it a go. The idea of doing a room in detail is a great one. Thank you for your inspiring words.

Suze Q said...

We changed over to a cash budget at the beginning of August. We used our tax refund to help set up some of our categories, but now eveything runs really well on a fortnightly allocation.

After reading your post I felt inspired to show how we do our "baggie" system on my blog. I didn't put in my $ values, but I wanted to share with you that since switching to cash and be more accountable by meal planning and utilizing opportunities such as our church group being offered free bread each fortnight, I now have for groceries $ 130p/w for dh, me, ds13, ds12, dd8 and ds4. I was also really happy last fortnight - I had $19 leftover!

I am trying to be "present" as I make these financial decisions that effect our family so much - instead of coasting along on the river Denial and hoping it all works out by itself.

Regards
Suze

shandora said...

Okay, Now I am definitely going to start this system for the 1 of januari! and I love the harmonica idea, I'm going to get the same system! thank you all soooo much!