Are your finances a puzzle?

When you think about your finances do you worry about how it’s all going to fit together?

Do you wonder if it will ever come together nicely, or if there will always be twists and turns that cause confusion?

When you set up a plan for your money, it gives you an understanding of what’s important.  What things are important enough for you to spend time and money on.

One of the ways I approach money is the same way I approach a jigsaw puzzle.  Tip out all the pieces of the puzzle, then work together to sort out pieces that group together nicely - it might be all the edge pieces, or all the blue pieces. For a particularly nasty puzzle it may be divided into the shape of each piece.

Once we group together the different types of pieces, then we can then work on getting those smaller groups connected. Join up all the edges to make a frame.  Join the blue pieces together, and the bits that form buildings or trees.  

Slowly but surely, the pieces start to fit together, and a larger picture is revealed.

When budgeting for your household finances, we do the same thing.  What are the boundaries?  What pieces go together?  What fits together, and what belongs in a different pile?

An example is thinking about how you want to group your household costs.  There's utilities like phone and internet, water and gas, electricity, plus rates, insurances and maintenance (or rent).  Would you group these all together or split them up?  Some are pretty easy to budget for - the same amount each month and rarely changes, and some things go up each year.

If you were to collect money to pay all of the bills for this group, what would that look like?  How much does each piece cost?  How much do you spend in total for this group?

Once we group the pieces together, you can then allocate a portion of your money to cover those costs, we then move onto the next pile - sorting and turning the pieces over to get a real picture of what your finances look like.

This next pile could be daily spending - the things that you spend to keep yourself alive (and living) ... food and entertainment, hair and body care, dentist, cleaning costs, alcohol... would you group these together or separate them?

There's no hard and fast rules about how you group your costs.  One couple I worked with wanted to have a bank account just for all the vehicles they had - to cover fuel, rego, insurances, maintenance, and licences.  However when we chatted further, fuel had to come out of that account into a different bank account with a card instead, so that it was easier to spend the money.

This is what I love about working with my clients.  I get to listen to and add my experiences into how they group their costs, so that it works for them.  I can help you quicken up the process so it only takes one go to set up a budget that works, and not 3 or 4 goes (like it's taken me).  Some people don't mind having 5 or 6 cards in their wallet - and other people freak out at the thought.  So how you want to operate plays a big part in how you sort your pieces out.

Is it time for you to tip out your jigsaw pieces onto the table and start grouping your costs together, to create your household budget?