I usually like to spend the quiet time between Christmas and New Year organising my finances for the year ahead. What worked? What didn’t? What would I like to improve on? What are my financial goals this year?
I made a start after Christmas then went to visit family for a while, played catch up when I got home, and for various other un-exciting reasons, never really got around to finalising. So as I’m house-bound with young children on a 41 degree day, I thought I’d pull my finger out and get organised for the year ahead. It’s never too late to start!
I like to keep my everyday bills and account information in one folder for easy reference. Things like tax information, mortgage statements, medicare and superannuation etc I file elsewhere. In my everyday folder, I have tabs dividing my bills (rates, cars, electricity, water etc), and at the front I keep my Expense Schedule. This spreadsheet shows me all of my regular bills in the column, then estimates of amounts in the appropriate month when it should be due. I create my Schedule before the year begins, and use my previous bills to work out how much my future bills might be. This means I can see at a glance what bills are due in, when and how much they should be. No nasty surprises! Bel and I have written a post on how we organise our finances, check it out here.
So looking back at 2017, what worked for me? Before the year started, I opened a few bank accounts to help me organise our money. That definitely worked. I never budgeted for clothing or car maintenance, so I made sure I opened accounts for both and had a set fortnightly amount go into it. This was a huge win for me last year as we had two unexpected visits to the mechanic which completely wiped out the car account. I was so thankful to have had it there to use. I also never budgeted to go out and have fun. Working on one income means finances are tight and so spending money on an outing was never a priority. But that also meant we didn’t go out much. Last year I opened an account and called it “fun money”. This was strictly for family use to go out and enjoy ourselves. So even when finances were tight, we were still able to go to the beach and buy hot chips, or go to a strawberry farm and pick fresh strawberries, or buy a sweet from the bakery. These were special treats that our children absolutely loved this last year.
If you haven’t already done so, we would also suggest you open a Christmas bank account and organise a set amount to go into the account every pay day. There is no need to rely on credit cards and get into debt at Christmas time. It’s always on the 25th day of December, every year, so you need to plan for it. Today! I used one last year and it was amazing to have the money there in the lead up to Christmas. It meant if I found something suitable in October, the money was there and I could buy it and put it away.
Some tips for organising your finances in 2018:
- File your bills properly, don’t shove them in a drawer. They’re a valuable source of information and will help you forecast your bills next year.
- Write an Expense Schedule so you can see at a glance what bills are due and when. No nasty surprises.
- Consider opening a Billing account. Work out how much you spend on bills over the year then divide the yearly amount into weekly/fortnightly amounts. Have this amount (plus a bit extra for a buffer) transferred into the Billing account every payday, and pay your bills from here. Check out Bel’s post here for more info.
- Look at opening separate banks accounts to organise your money. Don’t forget to check out if there are any ongoing fees on these accounts. Ring your bank and speak to someone if you’re unsure.
- If you have an expense that you don’t priories (ie clothing, fun money, holidays etc), consider opening an account for it.
The main thing is, it’s never too late to get organised. Start the year with a clear focus on where you’d like to be this time next year, and implement some steps now to get you there. Take control of your finances and make them work for you. Make 2018 the year you smash your financial goals!