Here's a really simple way to simply your household budgeting and remove money stress... Do you struggle with your household budget?
Do you get fed up waiting to see if all the direct debits have gone out before seeing how much money you have got left to spend?
Do you find that sometimes, you have got too much month left at the end of the money?
Does this then start to impact on your happiness, your self esteem, or your mental health?
If the answer to any of those questions is yes, here is a straightforward and simple way of organising your finances, using 3 buckets as accounts which will give you some financial freedom.
Struggling with money can have a huge impact on our mental health, sometimes the smallest of worries start to spiral out of control in our minds, and all of a sudden, we start to behave irrationally, making some of the most bizarre decisions.
In the past 6 months, I have come across two people, in almost identical situations – not great at budgeting, didn’t want to own up to their spouses or families how much they were struggling because they had a young family, took the burden upon themselves, turned to a loan shark, and those new pressures started to have a greater impact than ever before. Both started struggling hugely with their mental well-being, both tried setting up a crowd funding page to help them, and fortunately, in the end, both had the courage to speak to those nearest and dearest to them, who helped them out of the immediate situation, and onto an even keel.
Here is a simple to manage way of taking control…
To start, you need 3 financial accounts…
First, all of your household income goes into one account, and then, it gets separated into different accounts.
Second, you need to have a bills account – this is where all your household bills are paid from – anything which can be paid by a direct debit on a regular basis.
Total it up for the year, divide by 12 and that is the amount each month, which needs to be transferred into it.
Straight away, you never have the issue of having to keep checking your account to see if what you are able to spend, and getting confused because some of the direct debits may be due to go out.
That’s the household bills all taken care of – never an issue again.
From the main account, will still come things like food, fuel, personal spending – really things which are almost ‘discretionary spending’ which you have some control over each month.
At the end of the month, hopefully, there will be something left in the account, which you can now be responsible with.
75% goes into savings or repaying debt – whichever is the biggest priority, and the other 25% is there to treat and reward yourselves, by spending it on your relationship.
So if there is £400 left at the end of the month, £300 is saved into the third account, and the other £100 is spent doing something together THAT MONTH (you are not allowed to let this build up). If only £20 is left – that is still £5 you have to spend on something together, which may be as simple as sharing a coffee as you walk on the beach.
The point is that you have been responsible, you have rewarded yourselves, and you are working on your relationship – living life on purpose.
Recap
1. Set up a budget account
2. Figure out how much needs to go into that account each month
3. Put all household income into one account
4. Set up the standing order into the budget account
5. Use 75% of what is left responsibly
6. Spend the remaining 25% on your relationship
Creating the life you want
Website
Serenity Financial Planning website
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