Tuesday, May 22, 2012

Pinching Pennies - Planning Ahead

Elastic Mom-ness is an art that requires resource-stretching skills in many different areas of life. From making the available food in the home work for me, to using every last edible green thing in the garden, to careful wardrobe planning and more, it is all ultimately limited by the money on hand and how we use it.

At the beginning of every month I discipline myself to sit and tackle the dreaded budget. Yes, I know the B-word is a swear word in many homes, sometimes including my own.

Many years ago, I was taught a simple, clever tip that I always try to use when I plan my budget.

It is a PLANNING AHEAD tip so I can relax and enjoy the trip!

I take all my annual or quarterly expenses, such as children's extra lesson fees, school books, or memberships and licenses and divide the amount over the appropriate number of months. This monthly amount is then put in  separate savings account. When the lump sum is due to be paid, I simply pay from the funds in the savings account.

Managing my money in this way helps to even out the monthly expenses to a similar amount each month and takes the impact out of large, infrequent payments.

Area's where we have found this helpful over the years are:

# vehicle maintenance and tyre replacement
# school books
# annual licenses
# subscriptions and membership fees
# provisional income tax
# quarterly music and dance lessons
# extra courses
# family holidays
# unexpected doctor visits that are not covered my medical aid
# veterinary expenses 

It's simple advice really, but really helpful to me.

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