At the start of this year, my husband and I discussed our family budget, because we have specific financial goals for the next 3 years. After moving and moving and moving for the past decade, we have finally settled in one area, and we are able to invest our time and effort into establishing our family life in Brisbane.
In our experience, one of biggest challenges to the family budget is unexpected costs. And one of the biggest assets to budget success is streamlining expenses as much as possible. When we can allocate specific fortnightly/monthly amounts for regular expenses like phone, Internet, rent, car lease payments and insurance, it helps us to budget and save well for the year.
An expense that isn’t normally regular each month is electricity, and especially during those peak seasons, when the weather changes, it can be a bit of a shock. I’m an Origin Energy customer, and they launched a brand new product option for customers like me who appreciate predictability. It’s the first of its kind in Australia, and it’s called Origin Predictable Plan.
The video below explains the essence of the product, so take a look to see if it could suit your family. In a nutshell, you pay a fixed monthly or fortnightly price for 12 months for your electricity and or natural gas, no matter how much you use. The amount you pay is based on three factors: previous 3 months of electricity consumption, how you use your energy at home, and your personal answers to specific questions about your energy needs. There’s no lock in contract, so you can change the plan at any time. This is great because there’s no risk when giving it a go!
- Predictability – Pay a fixed amount for 12 months no matter how much you use
- Easy budgeting – choose fortnightly or monthly payments and know exactly what’s coming
- No exit fees – change to another plan at any time.
- No price increases during the contract period
- Hassle free – with direct debit payments which can be aligned with your pay
- Receive your bills by email and manage your accounts online
- Green Energy options
Many questions that may spring to mind — What if I use less electricity? What if I use more? Will this encourage more energy consumption? — are covered in the FAQ section here: Origin Energy This product may not be ideal for everyone, however, it’s fabulous to have the choice if you want predictability for your family energy consumption costs.
This concept of predictability is one our family are focusing heavily on this year because we see living costs as a base to work from. This isn’t just about money; it’s about reducing stress so we can invest in family life the way we like. We are even trialling outsourcing costs like lawn mowing as a regular living expense. It will be interesting to reassess at the end of six months to see if this is financially viable.
My husband and I are three months into this, and below I’ve set out some of the processes we are going through. When it comes to budgeting, I have found it’s important to not just do the numbers, but formulate a process, because you have to continually tweak and re-tweak.
1. Streamline Regular Expenses
Look at all expenses and streamline as many as possible. When you start looking into it, there are a lot of potential regular household expenses and factoring them all in is helpful when managing a budget. Often you can ask providers to jig payments dates around so they fall within a particular fortnight or day in the month. This is where Origin Predictable Plan is ideal!
2. Record Everything
This is a bit of a pain, but it’s important when you have specific financial goals. We record everything we spend. This way, we can see where we are spending (and wasting) money. We can look for patterns and budget better for the year.
Currently, we are using an app called HomeBudget (which syncs between our smart phones) to record all our expenditure. We can put in regular expenses that are the same each fortnight or month, and also add random expenses as they happen on our phone (which are usually with us at all times). We both use the app and it syncs between us so we both can see what we are spending.
No matter how well you budget, there’s always, always surprises so having a miscellaneous fund (this can be set up in another account) is a good idea. Again, we have found adding a specified amount (and it doesn’t have to be a lot) to base costs each fortnight or month, incredibly helpful for budgeting. The same goes for savings. Even putting a little away each pay cycle adds up, and making it a regular cost makes it achievable.
When you record all the numbers, it’s helpful to look back and see areas you can cut back on, or refine. Because our situation has changed this year, we will do this at the six-month mark to gauge on how things are going.
5. Re Budget
Because this is a process, we will continually rejig according to the records.
As a family, we have always worked loosely from a budget; however there have been times when we’ve needed to budget more strictly. I’ve done this process before when my husband and I were both students and had very little income! No smart phones with apps back then, so I recorded it all in a ledger book, but the process was the same.
- Establish a realistic base for living costs by streamlining expenses
- Record everything which makes you accountable
- Allow for miscellaneous costs (and savings where possible)
- Review the numbers
- Re-budget as necessary