With the lead up to Christmas, most of us a reviewing our finances and I thought I would talk briefly about the reasons for doing a budget and explain what an actual budget is.

A budget gives you…

*Direction and focus

*A snapshot that you can present to a lender for finance

What is a Budget?

A budget is a plan, a goal. It’s a monitoring tool for your finances. Most budgets cover a 12 month period and are broken down into income and expenses. Some software programs have a budget section built in, some use a spreadsheet. You can go to http://www.secretbudget.net/external/budget-planner.html

When it comes to the end of the first month of expenditure, have a look at your budget and do a comparison. Determine what was over and what was under or if using a percentage, where the budget is tracking based on when the expenses and income are come in during the year.

Why do a Budget?

My three P’s; Planning – Preparation – Prosperity!!

The idea of doing a budget is so you can see more clearly and plan for the year ahead, it’s a way of thinking ahead, financially. You need to predict your income and expenses for the year to ensure that you are staying above the line and finishing with a profit (or surplus) for your community organisation! It is also a great tool to have on hand for any financial assistance you may need to apply for. It demonstrates that you’re serious and that you have a plan/goal in mind!

When should you do a Budget?

Anytime at all! Most people walk around with their budget on the back of an envelope or in their head! Having taken the time to sit down and enter all expenses.

Who should do the Budget?

Being single parents, it’s up to you! Remember, the responsibility you are taking with your finances will be seen by your children. Involve them where you can.

How do you do a Budget?

* The first place to start is with your expenses. Gather the previous 12 months bills/invoices.

* Predict income. Use last year’s income and discuss how this will improve.

* Determine that you are earning more than you spend and then start setting some goals!

My best tip – Reduce expenses by 10%, increase income by 10% and you’ll be up 20%!!

Please contact me if you would like to cover a particular area in next month’s newsletter michelle@secretbudget.net

You can register for free at www.secretbudget.net for FREE (value $25) access to the database of savings tips and ideas!

I have budgeted for over 20 years now!
I would now have achieved in life what I have now - had I not budgeted. I'm not perfect but a budget helps to remind me what my present and future goals are.
It's difficult at 1st - but after a while it just becomes a habit.
Stick with it

Thank you for your comments! Can you share with us the kind of things that you have achieved over the last 20 years by budgeting?

Some of the things I consider achievements as a result of 20 years of budgeting include:
* Having money sitting in the bank waiting for my non regular bills to come in (eg Rego, Rates, Insurances etc). I don't have to take money from my regular pay when these come in - as money has already been allocated. Another added bonus is that because I pay my bills on time my credit rating is perfect.
* I don't lose sleep as I know that I have money to pay for life's necessities.
* Paying off my 1st house in 6 years (remember start basic and small!) - this has then allowed me to purchase other properties and investments.
* The ability to go on holidays or take time off work to enjoy other activities.
* I also track ALL of my expenditure - so I can tell in an instance where my money is wasted and focus on that (eg I used to spend lots of $ on magazines which I would glance through - put in the magazine rack and then the recycle bin). I know use the library or swap with friends.
Happy Budgeting

That's awesome! Thank you... Are you okay with me putting a link to your comments in the next newsletter? That really is fantastic and these tips will help lots of others!

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