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 the budgeting tool at Sorted.org.nz, which allows you to customise your spending categories and then shows you a pie chart of your spending. You can also save the results online or export/print them.

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 the Federation of Family Budgeting Services, Sorted.org.nz, and the Citizen’s Advice Bureau.

Go forth and conquer!