Tracking Your Spending And Setting Your Budget

By on November 5, 2017 in Spending with 0 Comments

BudgetI honestly think that the first step in making money is understanding where you spend the money you are already making.  The majority of us, are stuck in a 9-5 JOB, earn a pay check, and end up living week to week, because of wild spending habits.

The last post I wrote was about how much does it really cost to start a website.  Absolute bare bones is between $60 – $420 Aud.

I have friends earning good money, that would rather spend $50 on coffee each week, then a small investment in their future.

Now, I need to make this clear. My focus is to always to create multiple income streams as a preference, so it doesn’t matter what you Investment goal is.

  •            Shares
  •            Online Website
  •            Property

You will need some money to start the ball rolling.  To give you an idea of the things I started with $50 per week

  •             I’ve started rebuilding my share portfolio with $50 per week.
  •             I’ve started numerous websites, for under $300.
  •             I’ve started Forex trading accounts with $500 and grown it to $30 000

So how do you start ?

Firstly start tracking your expenses weekly – I recommend doing this for at least 4 weeks, but ideally 12 weeks if you can.

Yes I hear you groaning.  Sure that’s hard work, well suck it up princess.  If you have no money, my guess is you are spending it on crap you don’t need or in areas that are wasteful, I know that I have been.

Here is a look at my actual expenses from last week.

I worked out pretty quickly I was spending a lot of money of things that weren’t giving me an investment other than a hangover and a fatter stomach.

So the next step

Is to take your tracked expenses and wrap a budget around it.

This gives you a frame work to work on, week to week on where you need to spend your money.

I always prioritize spending money on essentials first. So for me its things like

  •        Loans
  •        Essential monthly cost – By doing this you ensure that you have enough money to cover the expense when it comes up

                                Ie. Mobile phone, Electricity, Car rego,Insurance

  •        Savings – This is an important one. Always put some money away where you can’t touch it. Rule of thumb try to make it 10% of your weekly income.

I have three accounts to manage this process –

  • Daily Savings account – Where my income goes into
  • Weekly investment account – Where I transfer the monthly payments, some banks offer a linked bonus account. Where you can transfer your weekly amount and let it accrue for the end of month payments and receive bonus interest.
  • Saving account – This is where I put my savings allocation.  I really don’t want to touch it.

Now you can have as many accounts as you want, just make sure your not paying excessive account keeping fees.

This is how my budget looks.

budget

 

I still keep track of my expenses, and I usually adjust my budget once every 3 months, as costs go up and down.  Pretty simple really.  It takes a little bit of planning, and the ACCEPTANCE that you need to control your spending.  If you can manage that your are miles in front.

The next step is to decide what and where you are going to invest that little bit of extra money you have. I hope this has helped.  I know that I feel better when I am in control of where the money goes.

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About the Author

About the Author:

Hi I’m Darren Boland, my passion is in creating Passive Income, this site is all about my exploits the good and the bad about how I got about doing just that.

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