It isn’t what you think.
Maria didn’t hire me on condition that I use the budgeting tool she and John developed. Honest!
She drafted me in because she needs help with keeping The Money Principle at the level she wants it to be; which is high :).
But probably she should have made it a condition for joining The Money Principle team. After all, Maria and John managed to get out of £100,000 (about $160,000 but this changes with the exchange rate) worth of debt in three years by using this tool. And I am broke at the moment!
I may have no money at all but I’m not stupid. So I used the tool to see whether it can help me manage my money better – scarce as this may be – and change my financial fortunes.
This is what I found.
What is the tool?
Like most commonly used household products it does exactly what it says on the tin, although in this case on a spreadsheet.
The Money Principle Budgeting Tool enables you to put everything money orientated in your life into perspective. I know you think that you know where your money goes and where you’re going wrong; so did I.
But this tool divides all expenditure in three different kinds: constant (fixed) expenses, changeable expenses and variable expenses.
As the names say, you should know what (and how much) your constant expenses are but you can do little about those in the medium term. This is everything about rent/mortgage, council tax etc. So, knowledge is good but action problematic.
Changeable expenses can be re-negotiated and reduced in the short to middle-run; these include phone contracts, paid TV, insurance etc.
Variable expenses – like food, grooming and general spending – can be reduced immediately.
All expenses are very detailed and filling these in – particularly the variable expenses – seems very daunting at first.
It is a fiddly job; but it doesn’t take as long as you may think. Well, you collect all receipts for a month, dump them in an envelope; then skip watching a reality TV show which gives you time to go through them and fill in the spreadsheet – done! And, as a bonus, you have preserved your good taste!
Even if you, like me, feel you already know where you may be going wrong with your spending this is well worth doing. We all end up wasting pennies to the pound on the things we don’t need or could get for cheaper elsewhere, so a detailed budget can bring clarity to mind about your day to day living.
If you want to have a go and play with the Money Principle Budgeting Tool click here.
I’m not here to sell you the idea of saving. That should sell itself.
What I am here to do is to tell of you my experience with money struggles and how such a budgeting tool is benefiting me.
Over the last couple of years, since finishing university and looking for work, I have been as guilty as anyone for spending money that I don’t have the liberty of spending, and with limited knowledge of where my money goes.
As many of us know it feels horrible when one really has no money at all, and over the last eighteen months or so I have been wrestling with the Jobcentre and related benefit offices, trying to get myself back into full time work.
The whole experience has been one of desperation at times, especially after the UK Department for Work and Pensions has put heavy sanctions over the heads of benefit claimants who in some reported cases have fallen devastatingly ill.
All that has preyed heavily on my mind and overall outlook, so I have to be honest and say I was irrational with my money when I did have it.
Anyone from people of youth and relative innocence like myself, or those more senior and experienced, can get into a downward spiral as we endure the demands of the government, employers and life itself.
It’s been tough at times for me, and may continue to be so, but with a clearer outline of where my money is going I feel I can take charge of the immediate future.
How to survive is a constant worry for people of all ages. What I found is that survival is much easier – and the future a bit brighter – when budgeting and keeping tight control of my spending.
Who knows, this may help me turn things around. This budgeting tool not only show where my money goes and how little I have; it also tell me that I have to get a grip and start earning more.
You see, I don’t have a predicament any longer; I have a problem (not earning enough) and every problem can be solved.