How to manage your monthly expenses

If you are like me, in Australia, I get paid fortnightly. One of the jobs I used to work in before paid me weekly. I know this is quite different from how things work in the US. When I first started, my money was all over the place. I had no idea what our fixed expenses were and what we paid for our variable expenses. It drove me crazy for a few months. So I did what i do best, I sat down and made a list.

The first step to managing any type of incomes or expenses is to list them down. Use an excel sheet, pen and paper, google sheet (this is what i use and I share this with my husband so he is in the loop).

1. List your household income – Change this to the monthly income. If your income is not monthly – Divide fortnightly income by 2 and multiply it by 52 and divide that number by 12, i.e. {(income /2) *52}/12 . Do this for all sources of income.
2. List your fixed expenses – These are expenses that you will have to pay at the end of the month. These expenses have been the same and will continue to be this for a little while. This includes
   • Rent/ mortgage – we had a fortnightly rent payment for this that we requested our landlord to be changed to monthly.
   • Day care expenses
   • Phone bill
   • Internet bill
   • Minimum payments on debts – this will be the minimum that you have to pay regardless. Ideally you will be paying more than this.
   • Insurance premiums – we pay this annually – so I just divided it by 12 to get a monthly expense value
   • Car registration – again paid annually.
   • Gym membership – paid weekly – convert to monthly (X 52 then /12).
   • Any other subscription based memberships (Netflix, stan, amazon prime, etc)
3. List your variable expenses as an average for the last three months –
   • Groceries
   • Gas
   • Public transport
   • Dining out/ takeaways – Always include these in. You shouldnt be depriving yourself from having a life. Everything in moderation.
   • Charities
   • Anything that you have consistently spent on – any specific item that you have spent on every month. This could be going to the movies, something for your hobbies, gardening supplies, for us it is running related things, like race registrations.

As we are trying to save for our house deposit, I was really in awe of where our money was going. In my mind we were both earning well, we had a lot of surplus but for some reason nothing was reaching savings. Once I had this all laid out in front of me, it was an eye opener. So now we at the end of every month we generally calculate how much went into our credit cards, and transfer the exact balance into our savings account. It has helped us so much in reaching our goals for savings for this year.

The one thing every financial expert will tell you to start with is to write them down.I have a free pdf template – Click here to go to resources – and it will let you write all of your monthly finances on one sheet. This is an absolute game changer.

Let me know how you manage your monthly finances.