If you are a little like me, then it is most likely that you find pleasure in enjoying a good meal. If I had to describe some of my favorite daily habits, it would be eating. I genuinely enjoy eating a well prepared delicious dish any given day. I don’t hold back when it comes to ordering food at a restaurant or getting my grocery shopping done. The setback however, is that I enjoy eating and preparing meals so much that most of the time I tend to overspend paying for expensive dinners at restaurants, or going out of my budget buying ingredients that end up rotting in the pantry.
Three pitfalls to avoid when setting up a household budget
So your finances aren’t going quite as well as you had hoped, the bills are rolling in and despite earning an okay income you never seem to save us much as you would like.
You have been thinking about it for a while, you have been putting it off but desperate times call for desperate measures (deep breath) – it is time to set up a household budget!
How to Budget When You Are Broke
It is such a simple pleasure but every time I get the ice cream out of the freezer I am reminded of the period in our lives when money was so tight the ice cream rarely made it into our shopping trolley.
There is nothing fun about being broke, constantly juggling the bills and expenses is a stressful way to live. It is made particularly hard by the guilt you experience when do spend on fun stuff because you know you can’t really afford it!
What I want to share with you know is the simple 5 step process I personally use and have used with hundreds of clients to show them how to budget despite starting from a financial position best described as ‘Broke’.
How to Budget for Unexpected Expenses
I received some very sad news from one of my young coaching clients this week, a close relative had died unexpectedly and as next of kin, she was responsible for funeral arrangements.
The statistics are sad, scary and far too true. One-third of Gen Y have no savings and are struggling with debt. One in five could not find $500 in an emergency, and one in two young people experience financial stress on a weekly basis. It is little wonder that anxiety and depression have become so prevalent amongst our younger generations. This is why it's so important for parents to under how to teach your children about money.
As a budget coach, these statistics are absolutely heart-breaking because this isn’t how it should be. The core principles of wise money management aren’t difficult to understand or to apply but other than a lesson or two in Year 9 maths, no one is purposefully teaching children about money and money management.
Parents, I am sorry - whether you like it or not, it is your responsibility to teach your children how to manage money. It is your responsibility to teach them:
- how to budget
- how to save a percentage of every dollar they earn
- how to avoid lifestyle debt
A couple of weeks ago, I was approached by a friend who wanted some advice on how he could get his wife interested - and more importantly involved - in the household budget.
While they were doing okay financially, my friend knew they could be doing a whole lot better. Sure - they paid the bills on time and paid off their credit card every month, but despite a healthy income there was never a lot left over.
With the prospect of starting a family on the horizon, my friend was keen to establish a budget and to start managing their money in a purposeful way. But to his great disappointment, his enthusiasm to establish a budget wasn’t exactly shared by his wife.
As a budget coach this wasn’t a surprise to me; not because I know his wife, but because this is a very common issue! It is rare in a relationship that both partners share the same enthusiasm for budgeting. But that doesn’t mean you can make it work.
So here are three strategies I recommend using to help get your spouse or partner on board with the household budget:
Every week, millions of Australians head to their local newsagents to buy their lottery tickets and scratchies with the hope of that life-transforming moment when they win it big. But what few people realise is that winning the Lotto is not all that it’s cracked up to be. In fact, far from being the life-changing moment you may dream it to be. Winning the Lotto harms more lives than it improves. In addition, easy access to debt is giving us the same "syndrome-like" symptoms.