Congratulations!
You've now created a budget, but we suggest that you take the
opportunity to refine it if you want to. Perhaps your expenses
are greater than your income, or you want to be able to save another
$35 each week, for example.
That budget was concerned with what happened
in the past. Now, let's plan for the future.
Take a moment to check through the following
items to see if you need to include any of these in your budget:
- Credit card repayments,
- Interest charges,
- Other debts you need to repay, or
- Miscellaneous. This will be an account
for expenses, such as newspapers, that are too small to justify
having their own account. The account will also be used for
the spending we can't explain.
Don't forget to save your budget.
If you're happy with your budget as it stands,
click here to move to the final page.
If you want to refine your expenses,
- Start with your fixed expenses, such as
rent or insurance. These are the expenses that are the same
each week, or month. Note that you probably won't need to change
these.
- The next group to review is discretionary
items. These are costs that aren't fixed, such as petrol and
CDs. If your expenses were too high, these are the items you'll
have to change, but be realistic.
Update the spreadsheet.
- If your expenses are still higher than
your income, you need to go through the budget again.
- The first task is to recheck your expenses
for reasonableness. For example, don't cut out lotto completely,
but perhaps reduce your spending by a couple of dollars a month.
Review all costs. Take your time. Save your budget.
This is now your new updated budget. Does
it look okay? If you're happy with it, please click
here to move to the final page.
- If your expenses are still higher than
your income, you need to go through it again.
- This is the part in the budget process
people find difficult. It can seem that there's nowhere to run;
everything and everyone seems to be out to make this an impossible
task.
- This is when the hard questions must be
asked and answered. Involve the family in these discussions.
Learning to cut costs and live with them can be a difficult
lifestyle change. To succeed, you'll require the agreement of
each family member.
Take a break and come back to it in a few
days when you feel refreshed. There's no hurry. The intention
is to make this work, but over the long term.
Now review your budget for the last time.
- All expenses can be broken down into the
following categories: fixed and discretionary, and essential
and non-essential.
- We've already looked at costs as either
fixed (for example, rent), or discretionary (for example, CDs).
Now let's look at costs in the categories of essential and non-essential.
- Essential costs are those that relate to shelter, health, clothing, and food, as well as contractual obligations such as debt repayment.
- Non-essential costs are those that could
disappear without affecting health or safety, for example, a
Sky subscription or video rental.
- The non-essential costs are the costs to
consider cutting first.
- You must ask yourself, can I cut this expense
out completely? If I do need money for it, what's the minimum
I need?
- Take a look at your essential costs. There
won't be much room for adjustment here, but take each cost and
review it. For example, you'll need to buy food and eat. However,
with careful consideration, you may be able to reduce the monthly
grocery bill by just a little.
Don't forget to save your budget.
Now that you've finished your budget, you're
ready for the final page: please click here.
If, however, you've found that, no matter what you tried to do, there doesn't appear to be any way to make ends meet, please contact a specialist budgeting assistance organisation for personal and confidential assistance. Many people reach a financial crisis at some point in their lives. These groups help thousands of families each
month. Please contact them, provide them with print-outs of the
work you've completed so far, and they'll help you get back on
track.
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