Do you know where your money goes each week, each month, each year? Like, do you really, really know?

I have to confess that I didn’t. I knew I was paying off my mortgage at a faster rate than I needed to, but I wasn’t sure if I was on track to pay it off within the time frame I wanted.

And I didn’t know how much I was spending on food or fuel or … frivolities.

So I got a budget. It’s a bit scary, because nailing it all down to the tiniest number means you’re being accountable for your spending. But it’s also exciting, because it means you’re creating a plan to achieve your financial goals.

I used Money Simple, which lets you customise your spending categories. You can also save your results online or export it to a spreadsheet. 

I broke down my spending into a couple of categories: Hard living costs (power, phone, internet); soft living costs (food, fuel, fun); mortgage payment; extra money I want to put towards my mortgage; saving for a yearly ski trip; and an emergency fund.

Doing it this way, I can see that if I stick to a certain range of spending on my ‘soft’ living costs each week, I’ll be able to hit my target of paying X amount extra off my mortgage and paying it off fully within a (much) shorter time frame.

I’m all about the budgeting now, because what gets measured, gets managed (and minimised).

By seeing how much I really have been spending, I can confidently make projections for the future, and know that if I keep my spending within certain boundaries, there’s no way I can fail to achieve my financial goals.

Want to make a budget yourself? There are loads of apps and advice online, and you can also check out ASIC’s MoneySmart site and Canstar’s budgeting advice.

Go forth and conquer!