Budgeting – some basics, some story

Squirrel in park

Watching squirrels in the park. Good old-fashioned free fun. Except for the train tickets to get to the park ...

In the last week or so, I’ve been reading budgeting articles over on Simple Mom. They’re not bad – you can find them over here. And they’ve been making me think.

I’m not going to try and go through the basics of budgeting; lots of other people have done that extremely well. So this is the bit where I get story-ish.

Childhood history … I’ve always been pretty good with money. My parents did a good job raising H and me in this regard (and in many others!) – I have memories of getting pocket money ($1 a week?) when pretty young, and tithing that at Church and being able to spend the rest of it on plasticky rings and chocolate bars. Gradually amounts increased, I had a paper round for a while, I was encouraged to save up towards big purchases like rollerblades, that kind of thing. Good foundations.

Fast forward quite a few years: I’m now through University. I have a pot of savings, mostly from gap year work – it’s been dented by becoming a British citizen (which is a pricey business!) and starting a master’s, but is sufficient to pay for the rest of my course fees and be a 6-months’ living expenses emergency fund. I have a 2-days-a-week job, which carries with it the possibilities of sporadic extra work as needed (e.g. secretarial), and I am paying rent to family/friends which means that I have the responsibility of paying it, but if everything goes wrong for C and I we are unlikely to be made homeless. I know I’m fairly good with money; I don’t tend to fritter it away. But over the last few months I haven’t necessarily known exactly where it all went … I knew it was pretty well-spent, but couldn’t always reconstruct exactly how.

So over the last couple of weeks I’ve been making tentative budgets and looking at where my money goes. And it’s been a really freeing experience. I now know why I can’t seem to save up large amounts: it’s because I’m not taking everything into account when I think about budgeting.

In my head, I budget for: rent, travel to/from work, basic food + casual bus travel, giving to Church, my mobile phone bill, and giving to World Vision. Doing this gives me a fair amount of money left over. So I feel like I should be able to save a lot.

But I’m not explicitly budgeting for: birthday presents, visiting the dentist/optician, holidays, other special events/travel, books, clothes, shoes, or meals out. Even if something only costs £10, there needs to be somewhere for that to come from … and this is where the surplus goes. Not really mysterious at all.

I still don’t have a system which totally works. I’m lucky to have enough slack in the system – e.g. still having a student overdraft – that I don’t have to worry about small slip-ups; if I end up £20 overdrawn until the next payday that’s okay.

At the moment, I’m saving to go to Malaysia with Mum in May (to see family who I haven’t seen for 8 years), so my current plan is to pare my spending down as much as I can bear, and then sink every spare penny into that savings account. I’m hoping that by having one big goal and throwing as much as I can at it, it’ll be easier to stay motivated than if I had lots of little goals none of which were being reached … that’s the plan, anyway. At the moment I’m 1/4 of the way there, and given the money I should receive between now and then my goal is possible but not easy. Here’s hoping I have the discipline to make it work.

How do you deal with money? What works for you?

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One Response to Budgeting – some basics, some story

  1. Jade Carver says:

    I’m going to have to learn to budget – and stick to it- REALLY WELL. As my new job is part-time, they’re paying me once a month. Gaaaah.

    Also I missed out on the first ‘month’ of pay (by a day, heh) so I’m going to have to stay with my old job for five weeks so I actually have money.

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