Auditing your budget
I recently read an interesting blog in which they suggested that you do a yearly audit of your budget, to check if you are on track.
I thought I knew where my money was going. My husband has a fantastic, very detailed, spreadsheet that he designed for our income and expenses. He has used this spreadsheet for a couple of years. After reading the article I sat down with the spread sheet and our bank statements.
Some things were right on target, others so way off it is no wonder we struggle to make ends meet!
Here are the particular areas that seem to have given us the slip.
Water & lights, this is because they fluctuate each month.
Cell phone costs, they were double what I thought because of contracts. Unfortunately, 3 of those contracts are only 8 months old but we were able to immediately change the 4th phone to prepaid.
Extra mural expenses, it is all very well to list the art lessons, ballet lessons, karate lessons, or whatever activity your child participates in, but what about that school trip, the birthday presents during the year, the class party? Where are they listed? Did you even budget for them? How much extra debt do you rack up on your credit card because of this?
Pharmacy costs, do you keep track of your levies? We didn’t have that listed at all. Do you have money for when you are in your gap, or is this just one more expense on your credit card?
How much are you spending on clothes? Kids have a really bad habit of growing!
This audit is similar to reconciliation in a business. It took a while to do the audit and a few loud discussions, but it is definitely worth it.
Here is an example of the worksheet.
|Water & Lights|
|Rates & Taxes|
|Cell Phone His|
|Cell Phone Hers|
|Food and Groceries|
|Life Insurance His|
|Life Insurance Hers|
|Dread Disease His|
|Dread Disease Hers|
|Medical Aid/Hospital Policy|
|Self Payment gap costs|
This is a project well worth doing as it will really show you where your money went!