Time to be an adult and do a budget
by Shelly Horton
Now I would love everyone to think that when you’re a journalist, you get the kind of star salary a Karl Stefanovic or Kochie earns, but trust me, when you’re a bit player in a very large organisation, the money’s not great.
Plus, you do not go into the media if you crave stability. Shows gets axed, contacts are short and you have to hustle for freelance work. Each year my income would go up and down like a bride’s nightie.
I’m going to be very vulnerable here and tell you about a time that I was in a lean period. I had a hosting job on a digital channel, when suddenly, I didn’t just lose the high paying gig – the entire channel closed down.
I was still doing a bit of work for Channel Seven, so I had a little bit of money coming in, but certainly not the sort of money that I was used to earning.
So, I did something that I’ve never done before. I did a household budget.
Sure, I was 39, but better late than never. Right?
Now I’m warning you, it’s boring, it’s annoying and it’s time consuming. But until you put on your big girl pants and know your household budget you are not going to win at life.
I recorded all my expenses for one month. And I mean ALL of them. I used the notes section in my phone. But there are some really good apps you can use that are free like Pocketbook, MoneyBrilliant and Goodbudget.
I recorded every coffee, dinner out, parking costs, taxis (it was before Uber), hair appointments and grocery shops.
It was frightening how quickly it adds up. The good news is I saw how much I was spending on my gym membership, and not using it, so I cancelled that quick smart.
Then I looked at my bills that came out of my savings account automatically. Monthly direct debits like rent and my mortgage on my investment property and health insurance. Then quarterly and yearly bills like car insurance, electricity, and car rego.
As I said, it’s a complete pain in the rear.
But once you have all the figures in front of you, it feels empowering to know exactly where you are at and what could be trimmed.
Once you do it for one month, it’s an eye-opening snapshot of your life. Some people do it for three months, but I would have died of boredom. Once you have your figures most financial advisers suggest you follow the 50/30/20 rule.
Allow up to 50% of your income for needs.
Leave 30% of your income for wants.
Commit 20% of your income to savings and debt repayment.
I didn’t stick to this exactly, but I did set up a direct debit for savings and paying off the mortgage. Then I just started spending within my means until I got my next gig, which luckily didn’t take very long. I then stuck to this budget and kept the extras as savings.
It feels like life homework, but hey, that homework can lead to you being a homeowner.