After writing many articles on the importance of budgeting over the festive season, this writer failed to heed her own advice. Moving the entire family to a new province took my eye off the financial ball.
The result — we were in overdraft by January. This just goes to prove the point that there is absolutely no way that you can manage your finances if you do not set a proper budget and stick to it.
But even worse, as a result one of my debit orders bounced, costing me R80 in penalty fees. This was also the debit order that pays off my credit card in full so now it will attract the interest charges.
I have settled the amount so hopefully it will not reflect on my credit record but it just shows how quickly finances can go pear-shaped if you are not on top of them.
A basic requirement for financial well-being is knowing how much money you have and how much you are spending. Having a budget and monitoring your bank balance is the only way to know that.
So we have drawn up our January budget, which now is even tighter than ever because we have to make up for our excess spending in December.
On the bright side, this is not necessarily a bad thing because it means no eating out or entertaining, which will help our bodies recover from too much of a good thing over the festive season!
Monthly budget
It takes about an hour to write up our budget for the month and we start with all the bills that need to be paid or will go off on debit order, like electricity, water, insurance, rent, school fees and savings.
We then budget for items we have to buy, like school uniforms for January and petrol (which has just got even more expensive).
We allocate our usual amount for groceries and see if we have any extra for entertainment or luxuries. This is where we can manage to cut back. Apart from the obvious eating out, we can allocate less for groceries by shopping more frugally.
By the 10th of the month what is left in our account is usually for groceries, petrol and entertainment so the key is to check the bank balance each week to make sure we are not overspending or whether it will be baked beans and toast for the rest of the month.
Our bank sends us an SMS each time we spend and provides a latest balance so that makes it easier to manage.
The experience cost me money, but it was a good reminder to start 2011 with a bit more financial discipline and to be reminded that our budget is the only way to stay out of debt.
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