An economist is someone who didn't have enough personality to become an accountant.

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Money is like manure. If you spread it around it does a lot of good. But if you pile it up in one place it stinks like hell. - Jr Murchison

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The fun side of budgeting.

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The fun side of budgeting.

The boring bit.

Have you ever had that feeling at the end of the week that your not sure what’s left in your wallet? Then read on. One of the most important aspects of personal finance is being able to create a budget and stick to it. Therefore the most important personal quality you need  is discipline. Without discipline none of this will be possible, so it’s very important to make the decision to start saving and stick to it !!

The next boring bit.

Collect your bills, add them up, keep a total and only change it if you have a new bill or expense. I’m talking about mortgage, food, electricity, gas, telephones, broadband and car expenses.

Roughly speaking your house mortgage and bills should be around 60-70% of your joint income if you are a two wage family of an income between $100-120,000.

If you are renting, maybe this will be a little less and around the 55-60% mark.

The fun bit !!

I recently talked about saving on my post Start saving now! Everyday living and bills can be combined and saved in one bank account. A savings account is also essential but we should also have a category for fun. What do I mean by fun?  Going out, having dinner, a few drinks, a weekend away, overseas trips or renovations – to mention a few.

I won’t mention percentages for the other categories but I would be happy if you were saving at least 10% of your income as savings.

Therefore if you are up around 60-70% of your income on mortgage and bills, save around 10%, then the good news is you have 20% or so to spend on GOOD TIMES!

Have your fun and then reflect on the prospect that you can do it all again next week or next month. Now the process should be automatic and the bills will be paid, the money saved and the GOOD TIMES HAD.

Enjoy, but of course – don’t over do it!!

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