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Mr & Mrs Smith Part 4 - Wednesday 1st April 2009
Follow the Smith family in part four of their year long Budget Renovation on their way to living life debt free, cashed up and laughing.
March was a bumpy ride for the Smiths. After surviving Christmas and January they were hoping that February would see them back on track. It didn't quite work out the way they had planned and they began March still baby-stepping along on their way to financial freedom.
Well, it didn't take a few weeks for them to get into financial difficulties, it took quite a few months and quite a few incidents of a monetary nature to get them to where they were at the beginning of the year. So it just goes that it won't take a few weeks to climb out of the hole and reach that glorious land of financial freedom.
Let's see how far they have come in 13 weeks:
1.Mr Smith has cut his smoking habit right back - to just one packet a week! This is so huge, from a money point of view and from a health position that this has to be the No. 1 good thing that has happened.
2.The grocery bill is going down, down, down. Mrs. Smith has been using the Grocery Tracking Spreadsheet to keep track of just where their grocery money is going and she reports back that seeing just how much money is actually going in the Treats and Laundry categories has strengthened her resolve to cook more and change her washing habits.
3.Generics have taken over the pantry - brand name items are few and far between, a huge change for the Smiths.
4.Mr. Smith took their Payment Push to the newsagent and had it enlarged and stuck it on the pantry door. Each time they make a payment on a debt they are blacking it out so they can see their progress every time they go into the kitchen. He also proudly rang to tell me that the newsagent didn't charge him for the photocopying either after he explained what he was trying to accomplish!
5.They have become used to using cash rather than their credit cards and while it took some getting used to, they both say they feel like they have control over their money and their spending. If there's no cash left then they can't spend until next 'pay day'.
6.The budget they drew up in February has been tweaked and adjusted to make it realistic and workable and this is exactly what should happen. Budgets are not set in cement - they need to be fluid because our needs are fluid. There will always be expenses that are more than budgeted for and bonuses that come in that haven't been allocated. Being able to tweak and adjust is a sign of a good budget.
7.They both have mad money - money to spend on whatever they like that they don't have to be accountable to anyone for. Mrs. Smith is saving hers, she's not sure what for yet, but she'll know she wants it when she sees it. Mr. Smith keeps his in his wallet so he doesn't feel poor.
They both spent some time online researching better phone and insurance plans and have decided to stick to the phone/internet/mobile plan that they have for the time being. Their current plan has them on free local calls, capped national calls, no line rental and free calls between their mobiles, with $150 a month free credit for calls to mobiles on other networks and a 40G Internet plan that they pay $130 a month for. As most of their calls are either national or to mobiles and they are heavy Internet users they are happy to keep this plan.
The utilities and insurances are another matter and they are still researching and asking lots of questions and promise to report back when they have some news.
During April Mr and Mrs Smith have a birthday present to give and Easter to celebrate. Mrs. Smith is making LCM Easter eggs rather than buying chocolates and she very proudly told me that she is even going to make the marshmallow for the LCMs rather than spend $4 buying them! For the birthday present she is going to make up a gift box (recycled from some flowers she received) of homemade truffles and chocolates instead of spending $30 on a knick knack.
This month could be a challenge for the Smiths. Mr. Smith's overtime could be cut back and they have budgeted for it. Mrs. Smith has been looking at some ways they can find some quick cash to make up the temporary (hopefully) shortfall and has planned a garage sale for the weekend after Easter and has gone through the cupboards and found some books and games that she will sell on eBay to bring in some extra cash.
Tasks for April
Task 1. Payment Push.
Keep on blacking out those payments and tracking your progress.
Task 2. Cash Budget
Stick to the once a week withdrawal and be proud of your progress.
Task 3. Take a look at the Spending Plan.
Make any adjustments needed and don't forget to follow them through to the Payment Push and Peace of Mind account. Move any excess money into Emergency Fund - this needs to be at least 6 months of total living expenses.
Task 4. Enjoy Easter with Junior.
March was a bumpy ride for the Smiths. After surviving Christmas and January they were hoping that February would see them back on track. It didn't quite work out the way they had planned and they began March still baby-stepping along on their way to financial freedom.
Well, it didn't take a few weeks for them to get into financial difficulties, it took quite a few months and quite a few incidents of a monetary nature to get them to where they were at the beginning of the year. So it just goes that it won't take a few weeks to climb out of the hole and reach that glorious land of financial freedom.
Let's see how far they have come in 13 weeks:
1.Mr Smith has cut his smoking habit right back - to just one packet a week! This is so huge, from a money point of view and from a health position that this has to be the No. 1 good thing that has happened.
2.The grocery bill is going down, down, down. Mrs. Smith has been using the Grocery Tracking Spreadsheet to keep track of just where their grocery money is going and she reports back that seeing just how much money is actually going in the Treats and Laundry categories has strengthened her resolve to cook more and change her washing habits.
3.Generics have taken over the pantry - brand name items are few and far between, a huge change for the Smiths.
4.Mr. Smith took their Payment Push to the newsagent and had it enlarged and stuck it on the pantry door. Each time they make a payment on a debt they are blacking it out so they can see their progress every time they go into the kitchen. He also proudly rang to tell me that the newsagent didn't charge him for the photocopying either after he explained what he was trying to accomplish!
5.They have become used to using cash rather than their credit cards and while it took some getting used to, they both say they feel like they have control over their money and their spending. If there's no cash left then they can't spend until next 'pay day'.
6.The budget they drew up in February has been tweaked and adjusted to make it realistic and workable and this is exactly what should happen. Budgets are not set in cement - they need to be fluid because our needs are fluid. There will always be expenses that are more than budgeted for and bonuses that come in that haven't been allocated. Being able to tweak and adjust is a sign of a good budget.
7.They both have mad money - money to spend on whatever they like that they don't have to be accountable to anyone for. Mrs. Smith is saving hers, she's not sure what for yet, but she'll know she wants it when she sees it. Mr. Smith keeps his in his wallet so he doesn't feel poor.
They both spent some time online researching better phone and insurance plans and have decided to stick to the phone/internet/mobile plan that they have for the time being. Their current plan has them on free local calls, capped national calls, no line rental and free calls between their mobiles, with $150 a month free credit for calls to mobiles on other networks and a 40G Internet plan that they pay $130 a month for. As most of their calls are either national or to mobiles and they are heavy Internet users they are happy to keep this plan.
The utilities and insurances are another matter and they are still researching and asking lots of questions and promise to report back when they have some news.
During April Mr and Mrs Smith have a birthday present to give and Easter to celebrate. Mrs. Smith is making LCM Easter eggs rather than buying chocolates and she very proudly told me that she is even going to make the marshmallow for the LCMs rather than spend $4 buying them! For the birthday present she is going to make up a gift box (recycled from some flowers she received) of homemade truffles and chocolates instead of spending $30 on a knick knack.
This month could be a challenge for the Smiths. Mr. Smith's overtime could be cut back and they have budgeted for it. Mrs. Smith has been looking at some ways they can find some quick cash to make up the temporary (hopefully) shortfall and has planned a garage sale for the weekend after Easter and has gone through the cupboards and found some books and games that she will sell on eBay to bring in some extra cash.
Tasks for April
Task 1. Payment Push.
Keep on blacking out those payments and tracking your progress.
Task 2. Cash Budget
Stick to the once a week withdrawal and be proud of your progress.
Task 3. Take a look at the Spending Plan.
Make any adjustments needed and don't forget to follow them through to the Payment Push and Peace of Mind account. Move any excess money into Emergency Fund - this needs to be at least 6 months of total living expenses.
Task 4. Enjoy Easter with Junior.