In the past few years, my money management skills have improved greatly. I have managed to finally get to a point where I am saving more than I generally spend, have targeted savings accounts and have even amassed some money towards a down payment on a home (though I just bought a new car, so some of that money will go to paying for it).
The one thing I have never, ever done, however, is set myself up on a proper budget and actually track where my money ends up. That is over now, as of October 1st.
I wrote up a budget and I’m going to do my best to stick with it. I followed the following budget ratios:
35% Housing (admittedly I’m doing more as I wish to put in as much as I can and cutting down my living expenses a tad)
10% Savings (this includes my retirement savings and some money into an emergency savings account).
15% Debt Repayment (I am very lucky that I have no debts to repay, so I’m putting it toward travel as I LOVE traveling and have two (maybe three) trips planned for 2016)
20% Living Expenses (this is going to be HARD…like crazy hard for me as this is less about living expenses right now–more like fun spending account!)
20% Transportation (this will be interesting given my new car which I just bought on Saturday).
I am now tracking everything I spend because I want to see just how bad my mindless spending is (ie the odd coffee at Starbucks, dinner out, fun new cosmetic to try out, etc). It’s been an eye opener already–I am only 7 days into October and I’ve already spent 70% of my “living expenses” due to circumstance (ie needed to refill pretty much all of my daily use cosmetics, haircare and skin care, etc), pick up dry cleaning…sorta the works. Needless to say, it is going to be a very quiet rest of the month, I feel…esp. with Christmas coming up soon. Yes, I did say the C-word. Oh and my car insurance is due the day before Christmas Eve…like Christmas isn’t expensive enough! Hah!
I don’t expect to be perfect this first month either. In fact, based on what I mentioned above and the social commitments I have (made long before I decided that I was going to make October the start of a new, more economic lifestyle), I know I will be over my living budget, but I am going to do my best to make an overages as tiny as possible. But in time, I will get the hang of this and find some economies (skin care, you are first to be “adjusted” in my new economic plan).
I am happy to admit, however, that I’m already starting to change my behaviour. I opted to skip Starbucks this past Saturday and made myself a coffee at home instead. It’s all about those baby steps. I also acquired a free, second hand curling broom for my curling lessons that start this Friday.
Got any budget tips to share? I’d love to hear them. :)