Have we forgotten some of the basics of household budgeting that our grandparents knew?
The system of "Grandma's tins" is really simple. First of all, it works in cash. Withdraw all the available money until your next pay. Get some tins, jars, containers - whatever suits - and label them according to your budget.
One tin might say "Groceries", while another might say "Petrol" and another "Entertainment".
Some tins might only get a few dollars added to them each week, and that's OK.
The key part is that you only spend the money when there's enough in the tin.
You will see the amounts in the tins going up and down each week, so you'll have a really good idea of where you're up to.
Of course, you will need to be wary of wayward hands, or robbing Peter to pay Paul.
Some people take two dollars here and there out of the tins, only to discover later on they haven't got enough money to pay for what they needed.
Others move money around the tins to juggle things for another week, but when something like the warrant of fitness rolls around there's absolutely no money in that tin. Whatever system you use will require some kind of discipline or restraint.
The electronic version of "Grandma's tins" is a cashflow forecast, which maps out your spending for the coming weeks.
Cashflows are an essential part of budgeting to ensure that there's enough money available to pay your bills as they are due. There's a free cashflow forecast spreadsheet available on familybudgeting.org.nz.
Raewyn Fox is chief executive of the Federation of Family Budgeting Services.
- Sunday News