My Budget Buddy

Things are getting pretty difficult for some financially. We brought land October 2022 and the minimum repayments on that started at $928 per month. They are about to increase to $1131. That’s a $200 increase in the past 9 months. Yes, I know it’s not going to break the bank, its roughly only $5 a week increase. Although, I could only imagine how much the increase is on repayments for others with higher mortgages and if you’re not on top of it, things can be very stressful. Anyone close to me knows that this is an unintended project I’ve been working on for years. It’s something I weirdly enjoy doing. Everything below you can take what you will and apply to your own situation. The number of accounts, amounts deposited, and names of accounts don’t matter. This is what we have tried and tested, and I touch on the most recent changes we have put into play.

My husband and I started off like majority of people, our own personal accounts and maybe a savings account each. At the very beginning, I opened up discussions about money to my husband and we would talk about our goals and how we would get there. Once we established everything, I opened up an excel spreadsheet and worked out our income predictions and listed all the expenses. It is something I can refer to and re-evaluate regularly with my husband to see if we can do things better, communicate any changes or new goals and expectations to make sure we are heading in the right direction. I already had some sort of system in place before I received The Barefoot Investor as a gift. However, I took some of Scott’s advice – multiple buckets (bank accounts), to get rid of debt and then start an emergency fund. We paid off credit cards, personal loans and car loans using his percentage method and saved up a nice little emergency fund. Things changed when we went from two incomes to one, but I still had my trusty spreadsheet to look over and adjust to make sure everything was covered.

As my partners pay is always different due to his roster, the amounts we deposited as percentages were also different, so we had no choice but to do it manually. Every fortnight once he received his payslip, he would forward it to me and I would put his net pay in my spreadsheet and it would work out the percentages, tell him what needed to go where and then wait for him to transfer everything. The other downfall to this was that for example, 60% of his wage would go into an account for bills and food so if there was money sitting there, it would usually be spent. My aim was to simplify things and moderate our expenditure. Initially, I bundled up expenses that are similar in nature and then I thought of how many bank accounts are ideal for what we needed them for. We decided on four joint accounts in total. This included two of our existing bank accounts (just changed their purpose) and opened two more joint accounts. This is what I came up with:

  1. Main Account (offset)
  2. Vehicle (offset)
  3. Groceries
  4. Play

The main account has no card attached and is an offset against our home loan. This account is where our nest egg remains. We also have all loan repayments, childcare fees, utilities, and anything to do with housing/land costs deducted from this account. I had set up everything via direct debit with our previous bank, so I had to submit our new bank details to our vendors. This is where my spreadsheet can come in handy to remember all bills. If there are all these deductions how are you not dipping into your nest egg? Well, the main account is now where my husband’s pay goes into and where mine will also be deposited once I start working again. Using my budget template, I can clearly see that we will on average be approximately $2000 up every month. The accounts listed above from 2-4 are our transactional accounts so each one has a different coloured card for easy selection. I love a good visual, so this is basically what our system looks like:

Once I was happy with the accounts, I revisited my handy dandy spreadsheet which I had already calculated his income previously by multiplying his hourly wage by how many hours he usually works. Tax? I got you covered. I used another handy dandy excel spreadsheet provided by the ATO. Click on your pay frequency and find the 'Witholding Look Up Tool (XLSX 34KB)'.
From there I was able to work out the net monthly average and used these amounts to set up scheduled fortnightly payments into bank accounts using my online banking app. Having the excel spreadsheet allows me to compare our income and expenses to make sure that the amounts being deducted from the main account were not going to leave the account in a negative balance by the end of the fortnight, and allowed enough money remaining to grow our savings as I mentioned earlier. Another great reason to have an updated list of all your expenses is when you have to fill out the expenses and liability forms when you apply for a loan.

You may be thinking, ‘why not use an excel spreadsheet budget template since you love excel so much?’ I did try these out initially, but they just weren’t exactly what I was needing. I wanted a tool to help me work out the best way to set up accounts to allow us to work out how to save for car maintenance or sudden big expenses. I wanted a tool that would work out the amounts to deposit in those separate accounts, and apply rules in which way we spend our money i.e. Use your own personal card for alcohol and take away etc. To sum it up, by the end of each fortnight the allocated money gets deposited into each bank account automatically to allow me to concentrate on other family things. If you are in a relationship you may not want to have joint accounts and that’s okay, my budget template can work for someone on their own financial journey or for people wanted to work together. If you’re still unsure, don’t sweat it - I learnt all this by trial and error and being resourceful. I hope this inspires you to take control of your money and achieve your financial goals.

You can find my buddy budget template here: Budget Buddy