One year older. One more tax return filed and a bunch of paper and finances in disarray.
How do you manage your operational day-to-day and yearly finances Ozbargain? My bank balance can't keep buying eloops forever :p
Some points to consider:
I have what started out to be a simple system, that kept getting more and more complex as I went along because it kinda became fun.
First, I tally up all "non regular expenses" and make a weekly average for them, this can take a while at first but its pretty important. For me it looks like:
Car bills 45
Rent 143
Groceries 50
Petrol 50
Utility bills 48
Big tech 44
Other tech 30
total 410
That's the weekly equivalent of all my bills if I average them. Of course, car bills include rego, mechanic, insurance. Big tech includes saving for my next laptop and car. Other tech is random tech you buy like phone, slow cooker, courses, and stuff I didnt foresee like car battery.
My after tax income is 850 a week but it varies between 800-950. First thing I do is put aside 410 for my "Bills account". I pay bills from bills account, most weeks this account increases but if there is a big payment like rego or buying a laptop it obviously decreases.
The other 440 (or whatever) is divided as 70% savings, 30% to use during the week (going out, hobbies, and other miscellaneous things like haircut or whatever).
Hope that helps!
Nice. This sounds like a really effective method of managing it.
Do you just track it on excel or pen and paper and just know 410 is your weekly bills from trail and error?
I track it on excel. I did come to the 410 conclusion after months of tracking my expenses and averaging them. A year later I tested if the assumption held true and for the most part it did (I may be underestimating Big Tech).
My biggest advice for anyone starting to save is to separate pre-payments of bills from savings. I believe savings should never be touched (perhaps only for investments). Everyone knows that car rego will come and it will be 1000+. I would hate to see my savings go down by 1000 at any given time. The psychological aspect of knowing that your savings are solid and will only go up is very important I think.
Having said all this, I assume my system will change when I purchase a home and have an offset account. All the monies will be mixed up, but the benefits will be worth it I guess?
Go to Steam and buy "You Need a Budget" during the Xmas Holiday sales (the historical low of this software was $14.99 USD, which is extremely cheap).
http://store.steampowered.com/app/227320/
Price history if you want an estimate of when the software will be on sale again.
Excellent software for budgeting. Not that I've used it much.
One thing to remember when managing finances is to ensure you have a rainy day fund. This is to cover unexpected expenses (e.g you need to fix a car, repair your home or you have an injury).
Also, live your lifestyle according to your income levels, not according to your wealth.
+1 on using YNAB. Really neat app. Need to watch the training videos to get your head around the concepts.
as an addendum you can add it to your steam wish list https://steamcommunity.com/login/home/?goto=%2Fmy%2Fwishlist
and you'll be emailed when it's discounted.
I use Anz Money Manager, more of a financial data aggregating data app, which has almost all the functions that I would need. It's a shame that it's online only, but then I can export all the information out in csv format if needed.
One more tax return filed and a bunch of paper and finances in disarray
What a time waster
A stupid post by someone who in the past tells us they are an accounting major graduate, hell if you cant manage your finances.!!!! ROFL
https://www.ozbargain.com.au/node/135018
Really what is your game here????
In fairness they don't teach you tax returns in Uni… Just because someone is an accounting graduate doesn't make them a tax return guru.
In that link you posted he says he is/was working at one of the "Big 4" and they don't do too many simple individual tax returns (something to do with charging $500-$1500 per hour!). He might not even be in a tax division (maybe he is in audit which has nothing to do with tax) so he could have little/no understanding of tax, let alone individual tax returns.
Just because I did an accounting degree doesn't mean I magically have the most effective way of managing my finances. I'm only starting out in life, so knowing how you file/track is important, so I can archive it for future reference.
Plus i thought it was just an interesting question. It's not just for my benefit. Others reading threads usually get something out of it too.
There's a great article on LH that showed how emotions can cause you to make poor financial decisions. It's worth a read even though you may not neccessarily agree with all of the journalist's points.
All pay onto free re-drawable mortgage (to offset interest)
All bills, All spending on FFP credit card with upto 55days interest free
Pay Credit card statement balance in full each month
Before I had a mortgage done the same but put all money into High Interest account til statement due,
I rarely use cash ever now,
When I was younger I used a spreadsheet as my pay changed each week to work out how much money I could blow on the fun stuff after expenses and forced savings… Looking back on it now is interesting, Oh how the priority's change ;)
No budgeting for me and I manage to save a reasonable amount each month. So no excel files for me. I just seem to have a natural ability to live within my means, but whatever works for the individual. I have many friends who absolutely need to do this.
I don't keep any hard copies, scan everything as it comes in and store all receipts in a folder for warranty/insurance purposes. Anything which is relevant to tax returns goes into another folder so that it's easy to prepare the tax return at the end of the year.
I have a wife, and her pressure on my testicles governs my use of the credit card.
Apart from that we do like most others, and cover required bases (read bills) with all our income going into the offset mortgage account.
I get paid weekly:
If I buy something (eg big ticket item for say $300 in one week) - generally what I do is drop my weekly spend by no more than $50/week for 6 weeks so I can still have some cash to spend that week, but so I dont overspend.
I get paid fortnightly. I also have rental income which comes in mid month and end of month.
Things I do:
- put all bills on a credit card with an interest free period
- pay off credit card the day before it is due to maximise interest free period
- pay off mortgages the day payment comes out (i.e. a month before they are due so a) I don't have to worry about it for the month, b) reducing interest payable - kind of since I have an offset account anyway but it makes me feel better and c) looks better with the bank)
- all pay goes into an everyday offset account on my mortgage
- pay rent the day it is due
I do have a budget somewhere but it was more about whether or not I could afford another property. Otherwise I just live comfortably. I don't splurge a lot and don't worry too much about budgeting or planning. I know roughly when major bills are due and make sure I don't go crazy in those months but that's about it. Sometimes my bank balance grows, sometimes it drops (I don't like the dropping) but generally I spend all I earn and I don't go without anything I really want.
Intersting thread I read before about credit and cash.
Some people pay everything with credit/debit so they can keep track.
I've always paid everything with cash… for almost the same reason. I've also felt paying with cash means its harder to hand over. I'm not much of a shopper, I want things but often find I pull back, I strongly feel its probably because of the act of letting the cash go.
Where I have used credit I have noticed that I more easily knowingly buy over priced items, or items I'd would normally pull back on. Online shopping is definitely evidence of that.
as a single person living on a pretty good income in adelaide, and currently paying a third of the rent i should be for the place im living in, i should find managing my finances pretty easy - and for the most part i do, meaning I can usually save about 40 to 50% of my after-tax income after bills, rent and groceries are paid for.
but i feel like i should be able to save more…it might be an idea to start an actual budget to keep track of my daily spending and income. can anyone recommend a good phone app? something where i can put my expenditure into it every time i make a purchase, so i can see where my money is actually going and manage leakage!
You Need A Budget (mentioned further up in this thread) has a mobile app that links to the desktop app via DropBox. Set up your budget on your PC, then record your expenses and monitor your budget on your phone. I've even trained the wifey to do it now too. :-)
Our family income goes into our home's offset account to minimise non-tax deductible debt.
We pay for everything possible on credit to delay the payment.
Credit cards are paid when due so no fees/interest are paid.
Our offset account is also the rainy day fund / zero risk investment / tax free investment.
Credit cards are a great way to keep track of your spending as they generate a digital trace on your bank statement. Thus you can easily record your transactions for food/bills/fuel etc. This allows you to manage your finances/budgets better.
100% agree with this method. I do exactly the same.
I have my money organised six ways:
1) Misses - she pays the bills/manages investments
2) Video Games
3) Lego
4) Holidays
5) Casino
6) Food
Whatever the Comptroller doesn't need flows on to the remaining buckets.
UBANK SAVER/ULTRA with VISA debit card, 4% on blalances under 200K
COLESSOURCE M/C for POINTS and no FEE
Looking at a low rate C/C with 0 exchange fee's
Make sure you have HEALTH INS EXTRAS (SEE MY OTHER POSTS), HOSPITAL if you need it or the tax
And save as much as you can, simplesavings website have many how2 and extra money ideas
My funeral will be BYO too
I use a very simple formula.
Income - savings = expanses (I average it out by 12 months)
No budget and not a care in the world. Cash only. Most of what is left over goes to cones and escorts.
It depends on what stage of life you're in… Sounds like you're very young, new grad, no family? How are your parents like? If they have good financials, talk to them, or any family or friends who know you well. Since you're starting in your life, you need to experience life and not to be mean to yourself. That doesn't mean buying $300 cake or go to pub everyday:-)
I come from a poor family and had to be frugal. Then I became single mother with no support from my ex. One way is to set targets: I wanted to buy car, house, holidays.. That helped me to focus and spend sensibly.
If you can identify your big ticket items perhaps post your specific question here…
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Unless you have more than the average family / couple then it is just common sense.
Cover the essentials first, if anything left after that then put some aside for a rainy day and also for a little fun.
Live within your means, Not a popular thing these days.
HP & credit means you pay twice for whatever you buy… Not a smart move? It's OK for essentials but for non essentials it is financial suicide.
Some people have zero interest in managing money, they just live from day to day and don't give a damn about tomorrow or the future. (sort of like a labor govt lol)
When it all goes pear shaped they cry poor me.
I have known many people who are broke within 24 hrs of being paid… and they are happy doing that. They delay paying bills then complain when utilities get turned off and they have to pay a reconnection fee. DOH!!
You know that the rent or mortgage has to be paid, groceries purchased and utilities paid for and you know roughly how much they cost so there is nothing difficult in working things out from there.