I love budgets. They are important for my wellbeing. I get stressed if I am not in control of where my money goes. I have two budgets. Yep, you read that right TWO. I call them my Regular Money Budget and my Reserve Money Budget.
Would a Reserve Money Budget Work For You?
To put it bluntly, I have ‘things’ that I want to do in my lifetime. These ‘things’ are dreams, achievements or purchases I want to make (no, not a designer handbag but bigger things like a house). It is these ‘things’ that keep me motivated and constantly striving to be free from debt, save money and make money – all the things I like to write about on my blog!
One of my dreams is travel – the other area of my blog. I have a dream to visit every capital city in the world. In reality, I think I would need to win the lottery (I don’t even do the lottery) but it doesn’t stop me dreaming.
Regular Money Budget
My Regular Money Budget is exactly that. It is a list of all my REGULAR outgoings. These are payments that go out of my current account, at the same time, each month and generally the same amount each month (barring any annual increases).
As my income hits my current account the regular payments are paid out over the course of the month. I never go overdrawn as I don’t spend from this account. It is simply the account my main income is paid into.
Reserve Money Budget
My Reserve Money Budget consists of a list of outgoings that may happen annually like insurance renewals, Christmas or across the month like grocery shopping, pocket money payments etc. It also covers things like school trips – in fact anything that I may have to pay out over the year but is NOT paid out via a monthly direct debit or standing order.
Why Have These Two Budgets
The simple answer is because it ensures that I am in complete control of my money and cannot spend ‘accidentally’. Like when those designer earrings fall from the display and knock your hand (which happened to be holding your debit or credit card) into the card reader!!!
My Reserve Money Budget is instantly transferred from my current account, the day after my salary has been paid in, straight into a separate account. This is an instant access account and one where I can only access my cash from a cash machine and not via a debit card.
This prevents me from being able to make impulse purchases. If there is something I desperately want, I have to physically walk to the cash machine, withdraw the money and hand the cash over to the cashier – by which time, I have probably come to my senses lol!
Keeping Track of My Reserve Money Budget
To keep track of this budget, I have a spreadsheet. In the spreadsheet I have a column for each ‘category’ that the money relates to. This way I can see instantly how much money I have left for groceries or how much I have saved towards the car insurance etc.
Would Having Two Budgets Work For Me?
Yes. Having two budgets could also work for you. Why not give it a try? If you do try it out, let me know how you get on. I love to hear your feedback.