Monday, January 19, 2009

Finances and pocket money

I bought myself a copy of the Simply Budgets program after hearing some good reviews of it, so I spent last week entering budget details and trying to get my head around the program. I've been a fan of Microsoft Money for years for tracking expenses, but it's budgetting side was quite atrocious (in my opinion!!)

Simply Budgets doesn't track expenses - it simply forecasts your cash flow. They use the analogy that tracking is like driving while looking out of the rear window - which I had heard before but is quite apt! With Simply Budgets, you enter in your regular expenses, starting dates, cycles etc and it forecasts your cash flow. You can select that you'll be paying things via credit card if you want.

One of the good things about it is the long term savings forecasts for things like fridge replacement, car tyres, car batteries etc. You enter the life of the item (it suggests a length for many things), the cost and the current age, and it tells you how much you need to save to have the money when you need it.

I really like the way you can set your own cycle for things - I have a 6 weekly chiro appointment and it really used to peeve me in Money that it could only be monthly or 2 monthly. This one you can set a 'number of days' cycle.

One of the hardest things for me to get my head around is that it doesn't track expenses. There is nowhere to enter an 'actual' figure - you simply roll the budget over and change the opening balance of your account. I'm still trying to decide if this is good or bad! The only times I tend to look back at expenses is to work out a) did I pay something and / or when, and b) how much was something. I'm not sure if bank records will be good enough for this, but time will tell.

It has made me realise that we have a $1000 hole coming up in April that needs to be plugged before then! It's also made me think about the way my accounts were structured, so I've done some reorganising in that area.

It's only been a week, but so far I think it will be a very useful investment.


Bel reminded me that I hadn't updated on my grand pocket money scheme for Billy that started in December. Well, its so far so good! His room has never been clean for this long before - I suspect some of it may be surface clean - I haven't gone delving under cushions and things, but I'll accept that for now!!

His chart consists of 2 things he has to do each day to get the full amount of pocket money each week - keep his room clean, and be good. 'Be good' is of course a relative term - as long as he doesn't have a complete melt-down and isn't consistently bad then he's ok! I have just added an extra line this week - 'clean teeth'. I added that one after realising his hygiene habits have slipped somewhat lately - he was 'sprung' when I found his toothbrush still packed away 4 days after we'd gotten back from holidays!!! (Yes, no 'mum of the year' awards here for not checking lol!)

So most weeks he's gotten the full amount of pocket money ($2) - he loses 10c for each square not stamped. While we were away it got spent a fair amount on lollies since we were at the corner shop every day or so buying bread. I consider it a learning exercise though - he still got to work out what he could afford and he started to see that some things were better value than others. Plus the pride on his face as he was offering around lollies that he'd bought 'with his own money' was priceless!

This morning he had $11 in his wallet when we went shopping - and boy was it burning a hole in his pocket!! I talked him out of buying half of the toy shop (we went in there to buy a nephew's present), but he finally ended up buying a Disney magazine with a WALL-E pencil case while we were in the supermarket. He's still coming to grips with the idea that once he spends it, it's gone - he was still talking about going back next week and buying a toy that he *had* almost had enough money for! Oh well, better to learn that at 6 than 26!!

It's also cut way down on the stuff I would usually buy for him - now when he starts harping for something I just say "do you have enough money for that?" and it usually stops him in his tracks!

So all in all, it's successful so far!


Cathy said...

Hello Kez

Ddownload this (free) and try it as a backup. You can work out the budget and then as you spend the money and enter it into the spreadsheet it compares budget with expenses which is what you wanted.

Take care

Take care

Mrs. Pivec said...

Too cute that he's got "be good" on his chart. I have a feeling his chart will grow as he does - we find them quite helpful! I also have used "wish lists" for things they think they want when they see them , but I won't let them get right away, wanting them to think things over a bit longer. That often helps them feel that they are "doing something" with the urge they have to spend and if they do find in a week or so that they want the item, it will, by then, be a good and thoughtful purchase.

katef - said...

Sounds like both you and your little shopper are doing great sorting out your money!