Hi friends. How we are 9 weeks away from a new effing decade I do not know, but alas here we are. With 2020 charging towards me, I wanted to give my budget a three month overhaul to get me through to Christmas.
If you’re anything like me, a new season brings new style of spending. In the winter I’m all about managing those cosy nights in ordering armfuls of takeaway, and in summer I need to factor in the daily hankering for sunset beers or weekend Aperol spritz binges.
My budget refresh accounts for the change of season, and digs into what I want to achieve financially for the next 3 months. It also looks at the new year, and what I hope to do money-wise from January. Sometimes you need to do some financial groundwork before you start working on a specific goal, so that’s what the next 3 months are about for me.
In the new year, I want to start investing more into shares, and if I continue on my plan to pay off my old credit card by December, I’ll be able to do exactly that. I also want to get my emergency fund to 6 months of expenses, so the new year will be about putting money in the right places – and hopefully, having more of it to play with.
Before I embark on that, I’ve got some spending to do. I’m going to pay for my Mum’s flight out to Melbourne next year, so I need to get those savings topped up and tucked away for when I need them. I’m also taking a big leap and having a new website built for The Broke Generation which is setting me back almost $4,000. It’s taking a lot of deep breaths and chanting of ‘you can do this’ to actually hand over this money, but this year has really been about backing myself, so you bet I’m bloomin’ well going for it and legitimising this little love of mine with a fully custom built site.
The 3 month ‘big picture’ budget plan
So how did I crunch the numbers?
When I do budgets like these that play with big numbers bigger than my fortnightly paycheck, it’s important to think big picture.
To start with, I wrote out all the income I can reasonably rely on between now and December 31st. That includes my salary, and a couple of freelance projects that are already locked in.
Then, below that I wrote out all my fixed costs, so my mortgage and household bills, as well as phone bills and costs associated with my blog/freelance work.
Then I accounted for Christmas presents, which is usually fairly easy because me, my boyfriend and his sisters have a system that means each person has a set budget for each person… if that makes sense!
Once those fixed expenses are locked in, I subtracted the total of those to Dec 31, from the total income I had forecast until Dec 31.
What I have left is where we work our magic.
I looked at my calendar and wrote down the events/occasions I’ve already got locked in, and estimated how much I’d want to spend on each one, before writing down any money goals or bigger things I want to spend on between now and Dec 31.
By adding up these bigger spends all together, and subtracting them from what’s left of our big picture income calculation for the 3 month period, we see what’s left for day-to-day spending.
That total number for day-to-day spending is then divided by 12 weeks, giving you an easy, sustainable figure you can reasonably live off for the next 3 months, while still doing everything you want to do.
What this does is it accounts for weeks when you might go to a friend’s birthday and spend $100, buy three Christmas presents for $145, and end up getting Uber Eats two nights in a row. By calculating a big picture budget for the three months ahead, you’re able to balance out bigger spending weeks with lesser spending weeks, and know it’ll all work out in the end.
Let’s say you earn $1800 per fortnight.
By multiplying this by 6, you get your 12-week income projection of $10,800.
If your rent is $300 per week and bills are $100 per week, take off $4,800.
Then you’ve got $6000 to work with over three months. How will you allocate that?
Let’s say you want to book that flight to Europe next year for $1200, and you’ve got three friend’s birthdays and a hens party that you’ll want to splurge $200 each on. Take off $2000 for that.
Then you’ve got $4000 left.
How will you allocate that?
Perhaps you want to save $1000 for the New Year, and pay back your Mum that $500 she lent you ages ago.
Take off $1500 for those, and boom, you’ve got $2500 left, after hitting your savings goal, paying back your Mum, booking a flight to Europe AND splurging on your friends’ birthday celebrations and hens parties.
$2500 over 12 weeks leaves you with a tasty $208.33 of incidental spending per week. Considering all your bills are paid, your rent is covered, you’ve got a flight to Europe booked, and you’re on track to stash an extra $1000 on top – that’s not bad at all.
You might even challenge yourself to save a bit of that $208 each week on top, too.
Have you ever done a big picture budget plan like this?! Tell me on Instagram!