How to keep a budget

Anyone who knows me will know that I love a good budget and I love to stick to it. I am queen of thrift. If I see a bargain I will go for it, as long as its within the budget. Since we had to cut back due to unforseen loss of income in the last few months, this budget thing has really come full swing. We have cracked down. Now, having a budget doesn't mean that you can't enjoy life and that you will be living on sausages and tinned spaghetti. No. Having a budget means that you know what you can afford and you live within your means, not above them.

We were suprrised with the pregnancy of our firstborn just shy of six months after we were married. Back then, I was working full time and hubby was just out of an apprenticeship. We were not rolling in it by any means. This meant that I was going to stop working and we wanted to have me at home and hubby working. This was what we wanted for our family and we were determined to make it work.

This meant working out what our bills were and what was coming in and and what would need to come out. We (meaning I) sat down and worked it out to the dollar and every week I would reassess how we were going.

I am happy to report that I got through ten years of living on one income, paying a mortgage and bills and even having holidays along the way on one modest income. It CAN be done.

The best way to keep a budget is to plan. Know when your big bills are coming. I pay most of my bills by the month. This works for us. This means that there is rarely a huge outlay, apart from registering the car. We pay insurance and health insurance by the month. I am in the process of trying to get my electricity direct debited by the month also so that we don't get the big quarterly bills. I also try to pay my rates up front with my tax return so that they are out of the way as they are a killer.

When it comes to grocery shopping I am a big advocate of the fortnightly massive shop. I have been a bit slack of late, but generally this is when my shopping happens. I write down all my meals and things I want to cook and I write a list. I take this with me and I stick to it. I don't just walk down the isles chucking things in willy nilly. Do this and you can expect about another $50 on average to creep into your total bill!

The other thing I do is not carry much cash around. I use my credit card for everything except bread and milk. This makes me think before I buy because when I use my credit card I KNOW that I will pay of the WHOLE balance at the end of the month. This is our credit card rule and I am happy to say that in over 13 years of marriage we have NEVER had interest on our credit card. BIG RULE. Try it. You will be amazed at the points you will acquire on a good credit card too, enough to get most of our family to Fiji in the next year or so.

Credit card debt is something I don't want. You shouldn't have it. If you do then you are not living within your means.

When it comes to clothing I buy alot of second hand. I have found a GREAT second hand shop that I can get anything at. It is amazing and I visit there whenever I need something. Otherwise Ill get stuff on sale. I rarely pay full price and if I do it is for a gift or it is something that will last a long time.

In regards to savings.....have some. I make it a priority to pay ourselves first. That means that each month I have a set amount of money that gets poured into our savings account. You will be amazed at how much that can accumulate over time. If we didn't have savings we would have been in alot of trouble alot of times I can tell you and I just don't think I could function knowing that there  is no buffer there. Always put some away, even just $20 a week makes a difference.

In regards to the mortgage we worked out from the start what we could afford and we stuck to it. We have a variable interest home loan but we still pay the same set amount. At the moment this is at a great interest rate and it sees us paying about $230 more a fortnight on our mortgage. This also means that the interest is less for us and there is a great redraw amount there as forced savings incase we need it. If you can do this and pay more, do it. You will save alot in the long run. It actually knocked off 10 years off our loan if we stick to it by doing it this way.

In regards to furniture and stuff we have alot of recycled stuff. We like it. We like vintage old things and it is our style. We would never go out and pay $5000 for a couch. It just won't happen here.

Live within your means. Its the only way.

Do you have a budget?
Do you stick to it?
Do you like second hand stuff?
Whats your best tip to stay in control financially?