Simply Budgets

I recently had a client ask me a question about how to deal with the household budget management when you are in a relationship and finances are shared.
It is EXTREMELY rare to find two people in a relationship who are both on the same page when it comes to money. There is almost always one who ends up with the responsibility of looking after the money and it is usually the other who is more inclined to spend and less inclined to save.
The problem is that neither party really understands why their partner is like they are. E.g. why are you so hell-bent on saving? Or why are you so worried about spending? Or why can’t you see that we need to save for the future?
It is very difficult for this to change because as human beings we are all different and have different things that we are good at and bad at. If both of you are prepared to at least take the time to sit down and work out a way to satisfy both personalities then there is a good chance a successful household budget management system can be achieved. On the other hand, if one is just not interested and refuses to change (or even listen), then there is definitely trouble on the way!
The secret, as I see it, is for a shared household budget is to give both partners as much of what they want as possible. You must have a family or shared budget of course, and it should cover the basic expenses that are essential. Then there needs to be some money that is totally for each person to spend (or save) as they please. If your husband or partner is not interested in saving but is happy to let you manage the household budget, then you should get him to agree to sit down with you while you prepare the budget so he can see what you are up against. If you use the Simply Budgets Personal Edition software you will be able to see a year into the future and together you will be able to see exactly what is coming before you get there. You will see when your tight times occur and when you have surplus. You will also know how much spare money you actually have. There is nothing like actually looking into a crystal ball and seeing your future before you get there to get your partner to be more co-operative!
Good Luck with your household budget and feel free to contact me if you need any more advice.
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Today I thought it would be a good idea to look at our ideas on personal money management and what we should teach our children about money and the value they eventually place on it. One of the key issues I focus on when I have my say about money is how little is taught in school about personal money management for life. However it is not any easy thing to teach in school and there are things parents can do to get their children off to a flying start.
Having been a teacher of secondary school students for over 20 years and having children aged 21, 18 and 15, I believe I am reasonably qualified to make some observations about the needs and challenges facing our youth as they enter the world of money.
As it stands, our society seems to assume that when we leave school, we will instinctively be able to manage money. The fact is though, that nothing could be further from the truth. We leave school with very little knowledge about personal money management and with a lot of pent-up desires and aspirations. For years we had been biding our time and finally we have ‘arrived’. In short, as we enter the world of money, we are like potential lambs to the slaughter. I recently heard an analogy that describes what can happen and often does. It goes like this.
When Mr. Money meets Mr. Experience, Mr. Money gets the Experience and Mr. Experience gets the money.
As school leavers, the lack of experience our children have places them at a great risk of making mistakes they will remember and suffer from for a long time. I heard recently that many school leavers are already in debt by more than $15,000 for consumer goods before they reach the age of 20.
We obviously need to help our children find the least painful path to experience! My belief is that there are key ingredients that parents need to install in their children so that they have the opportunity to avoid the mistakes made by their peers and often their parents before them.
I have heard many people say that they want their children to enjoy the things that they never had as a child. There is a major flaw with this way of thinking though. Have you ever noticed that it doesn’t matter how much stuff you get, you never reach a point where you can say you are satisfied?
I think it is clear that perhaps we should stop sometimes and re-consider what our children’s needs really are. I believe that less is sometimes more. I know that not having everything I ever wanted was one of the best lessons I ever had as a child, so I believe the first lesson is to arrange it so that your children work for the things they want rather than getting them too easily.
Teaching your children to work for their money is one of the best lessons they will get in life. They will place much more value on their money and things if they had to work for them. This is a great personal money management lesson that you can teach your children while they are young, they may not thank you now but they will thank you for it later.

What do personal budgets and holidays have in common?

A man went on a holiday. He had ten days to reach his destination 4,000 km away. Wanting to be sure that he would reach his destination on time he sat down one night and thought about how to make sure he could achieve this goal. He divided 4,000 by 10 to find that each day he would have to cover an average of 400km. A quick calculation allowed him to see that this was possible without undue pressure. Looking at a map he then found towns that would become his targets for each of the ten days of his trip. These were as close as he could find to 400km apart although he did make allowances for the fact that some parts of the trip went through mountainous country and would be slower going.

Having marked the “target” towns on his map he went about preparing for the trip.
On the first day, the man drove 400 km to the first town he had targeted and found he was feeling quite fresh. A quick decision was made to travel further than planned and he continued on his way.

Knowing he was ahead of his schedule was a great thing the next day because he decided he wanted to spend some time sight seeing. He enjoyed this so much that he nearly spent the whole day just driving wherever he pleased. As the day was drawing to a close he arrived at a town that was somewhat short of his original target for the day, but this did not concern him.

On the third day, the man drove till he arrived at the town he had originally set as his day three target and he knew he was back on track.

During the course of the journey the man found there were many days when he was not exactly “on target”. Sometimes he was ahead and sometimes behind. Because he had taken the time to map out a plan before he started, he always had peace of mind from knowing where he needed to be to be “on track”. He allowed himself to respond to impulses that made his trip interesting, but he also kept his original plan in mind.

Had he not planned his journey before leaving home there is a strong possibility that distractions and other impulses might have left him in a position where he could not complete his journey on time. It may have been an impossible journey to complete in the ten days right from the outset. This would also have been revealed during his planning.

It is important to realise that the original plan was never a binding document and it was never intended to dictate exactly what would happen along the way. It was simply a way of predicting where the man NEEDED to be each day if he was to complete his journey comfortably and on time.

Many people treat their finances like an ‘accident waiting to happen’ by never sitting down and planning the journey. Some people embark on journeys that are impossible to complete but they never take the time to work this out until it is too late. Others go through great stress every day simply because they don’t know if they are on track or not. They take side tracks and detours at all the wrong times and would have so much less trouble if they would just sit down and prepare a road map before starting.

Many years ago now I got so frustrated every month when my bank statement told me where I ‘WAS’ (financially) when I really knew that what I needed to know as well was, ‘WHERE SHOULD I BE?’ I invented Simply Budgets to answer that question and I have never looked back. Like the man on the holiday, Simply Budgets allows you to plan your year before you start so you are able to see if what you want to do is possible, and to give you targets each day that you can keep an eye on to ensure you are travelling along OK. You can still take the detours and side tracks, but always knowing where the main road is!

So, what do personal budgets and Holidays have in common? Well, they should both be a lot of fun!!