Living on an uneven income does add some complexity to budgeting and managing your expenses, however with the right system and a bit of discipline it does not need to be difficult. In my previous blog I outlined the two broad categories of uneven income as: The Seasonal worker – This sort of income is typical in industries such as farming, sales and tourism where income comes in lumps followed by long periods of little or no income. The Penalty Rate Worker – This type of ‘uneven income’ occurs when you work shift work or in a job that includes overtime penalty rates.
The Ideal Bank Account Structure for your Budget
Before I take on a new coaching client, I let them know that there are three rules to coaching that I need them to agree to before we get started. The first and most important of these rules is that they agree to do whatever I ask them to do, even if it doesn’t make sense at the time. Experience has taught us that you can’t half do a budget; you can’t just pick the bits that are comfortable and easy to follow and leave the bits that are time-consuming or difficult to implement.
How to Budget on an Uneven Income Part 1: The Seasonal Worker
Living on an uneven income does add some complexity to budgeting however with the right system and a bit of discipline it does not need to be difficult. Uneven incomes can be broken into the following two categories:
Mortgage Advice for Young Couples Part 2: How Much Can We Afford to Spend on a House?
One of the most fulfilling parts of being a financial coach is journeying with and helping people achieve financial goals that are important to them. One of the biggest, if not the biggest, financial goal you and I will face in our lifetime is to save for and purchase our first house. As a financial coach I also recognise that a big part of my responsibility to my clients is to give them the right advice, even if they don’t necessarily like what they hear.
4 Ways to Ensure You Have Enough Money for Retirement
A 2012 Study conducted by fund manager Challenger identified that the average Australian is retiring with just $60,000 in superannuation. Now many of the people retiring today have not had the lifelong benefit of employer superannuation which only became compulsory in 1992, however $60,000 is still a depressingly low figure. While most of us will have the benefit of compulsory employer contributions to help bolster our retirement savings you can be absolutely certain that employer contributions alone will not be enough to give you a comfortable retirement.
How to Budget : Physically Have the Money to Cover Your Expenses
How to Budget Principle #5 In Grandma’s days, budgeting was always a very tangible task. Either the money was in her jars or wallet to spend or it wasn’t. It was always very clear if you had the money to cover an expense. In today’s world of virtual jars and online banking it is easy for there to be a disconnect between what our budget says we have to spend and what our bank account says we really have available.
How to Budget: Have a System for Tracking Your Spending
How to Budget Principle # 4 At the beginning of this “How to Budget like Grandma” series, I shared with you how my Grandma used a simple system of glass jars to manage her finances. Grandma knew how much she needed to put in each Jar every payday to ensure that she had sufficient money set aside to pay each bill as it turned up.
When Do You Need a Budget?
As a budget coach, I think the answer to this is always. It is an unfortunate misconception that most people seem to think that they only need to budget when money is tight. But this view of budgeting seriously understates the powerful impact a good budget will have on a person’s long term wealth. In my role as a portfolio manager, I have managed multi-million dollar portfolios. It is rarely the people with the high paying jobs that have the greatest wealth but rather those that have earned modest incomes, budgeted well, and consistently grown their savings that end up the wealthiest. Having a high income is never enough, it is what you do with what you earn that has the biggest impact on your long term wealth. It is too easy to forget that what we are doing when we go to work is trading our most valuable resource, ‘time’, in return for money. Your average Australian earns $60,000, or $45,000 after tax and superannuation. This means every dollar you earn costs you 2.33 minutes of your life. Every time you spend $206 you will need to add another 88 minutes of work to make it back. In …
How to Budget – Understanding Your Budget Shortfall
How to Budget Principle # 3 In this series of blogs, I look at the 5 core principles that made my Grandma’s budgeting system so simple yet so powerful. While we no longer budget using a collection of glass jars tucked away in the kitchen cupboard, the principles behind Grandma’s system are just as relevant today as they were 25 years ago. In our first blog in this series, we discussed the importance of taking time to thoroughly identify all of our expenses. Not only do we need to know what our expenses are but we also need to know how much each expense is, how frequently it occurs, and, where appropriate, when it is next due. In our second blog, we outlined the process and importance of converting all our income and expenses to a monthly figure so we know exactly how much we need to set aside for each expense each and every month. The logic behind this principle is that if we set aside 1/12th of our future expenses each month we will have accumulated sufficient money ready to pay each expense when it turns up. However, there is one glaring problem with this system when first …
How to Budget – Calculating Your Expenses
How to Budget Principle # 2 In this series of blogs I am looking at the 5 core principles that made my Grandma’s budgeting system so simple yet so powerful. While we no longer budget using a collection of glass jars tucked away in the kitchen cupboard, the principles behind Grandma’s system are just as relevant today as they were 25 years ago.