It’s that time of the month, that time of the year where we feel like we are haemorrhaging money. It’s a joke, particularly has it always occurs on 1 April. April Fools! I am not laughing. Strata, Internet, swimming lessons, shopping day and to top it off the car service: all in the one day. However, unlike last year where things were tight, too tight, this time it is manageable. Now who is laughing?
So how did we go from $0.05 to manageable?
- Track spending
Though I was monitoring our bank accounts daily I struggled to keep track of exactly how much I could spend. I had a budget and I knew what amounts corresponded to which category however working out how much I had left that I can spend versus what needed to stay untouched was a challenge. I had listened to Michelle House on a few podcasts of Carrens Couch and knew that she was a budgeting expert. After reading her blog on how to track your spending I downloaded ‘PocketBook’ app and have not looked back. This app has been a fantastic tool with its safety spend feature and bill tracker. It gives you notifications of when you have upcoming bills, warning when you are getting close to reaching your safety spend and summaries each week of how much you have spent and it is more/less than the previous week. It is great how I have an app that adds up ALL my spending and I can’t hide or overlook anything! The best thing is that this app is free, simple to use and syncs to your bank account so manual entering.
- Christmas Un-hangover
Working through the 52 week money challenge in the last 6 months of 2015 was certainly a challenge as the amount increased each week. Sticking through the money burn rewarded us with a credit card free Christmas with all our spending, including hosting Christmas at our place, paid by our Gifts savings account. It was a fantastic feeling in January to not have to worry about a Christmas spending hangover. This year we are putting aside a regular amount of money each week into our Gifts savings account. The bonus is that we have money put aside for gifts throughout the year for birthdays and other special occasions as well as Christmas which makes for a stress-free gift giving experience.
- Credit card paid off
A side effect of tracking our spending was working out extra repayments to put towards the credit card. With the goal of paying off the card before the annual card fee kicked in in March, we paid off every little bit of spare cash we had. As the balance came down I reduced the card limit as a way to stop any chance of temptation or budget blow out. We made out final repayment on 26 February 2016, just in the nick of time!
- Debt repayment
While we still have some other debt hanging over our heads, moving towards a simple lifestyle and a slow home has given us the opportunity to reduce our spending and consumption. I make the majority of our food from scratch, I buy food and supplies in bulk where possible, I make home-made cleaners, I am working towards becoming self-reliant. I have also found a great way to track how much I have paid off our debt thanks to @beingdebtfree_1dollaratatime on Instagram (4 Jan 2016) . Draw up a table with 3 columns, column 1 is date, column 2 is percentages i.e. 5%, 10% etc and column 3 is the corresponding percentage amount of your total debt. The bottom row is starting debt (I flipped it around so starting debt is a the top). We are at 5% and this is not including paying off the credit card, onwards and upwards from here!
- Emergency fund
While paying off the credit card we were able to have $1000 put aside in our emergency savings account. I follow a few Aussie people on Instagram who work towards Dave Ramsey’s Baby Steps and this motivated me to get stuck into step 1 and 2. This week the tyres on the car needed to be replaced so we dipped into this account where in the past we would have used the credit card. It was a huge relief knowing that we had the money for such a big and unexpected expense. Our goal is to save up 3 months for joint expenses after we smash our debt repayments.
Do you use apps to track your spending or are you a pen and paper kind of person? Are you working towards paying off debt? Share what is working (or not) for you.