Money problems can be stressful. Ignoring the issue can lead to problems becoming worse and increased emotional stress.

Making the decision to tackle and solve money problems can remove uncertainty, reduce stress and help you feel more in control of your finances. It can also dramatically improve your quality of life, health and emotional wellbeing.

Knowing and understanding your finances and spending patterns can help you set and achieve goals and minimise unnecessary expenditure. At the end of this chapter we have included a budget planner which makes automatic calculations and can assist budgeting and money management.

If you are worried about debt, the Managing Debt section in this chapter, may be helpful. It gives practical suggestions about how to manage debt and where to go for free professional help.

Knowing your finances

In order to plan and save effectively you need to know:

• How much money you have coming in
• What you spend on living expenses and bills each month
• When bills are due (electricity, telephone, gas, rent etc.)
• How much you owe on loans and other debt.

Setting goals and understanding where money goes

Write down what you want to achieve financially – things like: getting out of debt, paying off a credit card, buying something substantial, or having money for a holiday. Making this list can motivate you and help with your plans. To manage money we need to spend less than we earn. If we are in debt we will probably need to cut back on spending.

Understanding the difference between essentials and things that you can cut back on, can help with overspending:

• Essentials are things that you can’t avoid - like rent and electricity. You might sometimes be able to make arrangements about paying a bill, but you will always need a roof over your head, gas, electricity, telephone and food. You should start with these essential costs.
• There are other things that you want, but might be able to cut back on. What do you think you could realistically cut back on? Are there things that someone else could share the costs of?
• Are there any things that you could cut down on, or cut out altogether?
• What can you avoid spending money on?

Separate needs from wants

To save money you will need to make choices about the things you spend money on. Make a list and separate the things you need from those that you want, could live without or could cut down.

This guide may be of help:

• Work out your spending priorities
• Avoid impulse buying
• Make a plan that includes your future financial goals (eg. in three months or six months).

Minimise spending leaks

Spending leaks are small expenses (like take-away coffees, for example) that you forget to include in a budget, but can add up to a lot of money over time. For example, three take-away coffees a week will costs you around $400 a year! A spending diary can help you identify spending leaks for small items. Keep a list of all your spending. The things you don’t get receipts for, like take-away foods/drinks can add up to more than you imagine.

Create a realistic budget

A simple budget can help you see where your money goes, and where to cut back. It can help get spending into perspective, calm nerves and put you in financial control. To create a budget, use the online version below. This does all the calculations for you, so you just need to type in your own figures:

• Enter all your spending – even the spending leaks
• Always allow yourself a small amount for treats
• Put some aside for emergencies if you can.

The budget planner subtracts your spending from the amount you have coming in. The balance will be the amount you have to work with. Review your budget regularly to make sure you are sticking to the plan.

Budget spending plan

This ‘Budget Planner' automatically makes calculations for you and includes further detail around managing your money. It can be completed online and printed out.

Download: Budget Planner

Pay yourself first

‘Paying yourself first’ is an easy way to control your spending and makes saving a priority. This means putting aside a specific amount of money to pay for essentials or a particular goal (like a holiday) as soon as you get your fortnight’s income. This is more effective than trying to save what’s left at the end of each income period.

Shop smart

Planning your shopping can make your money go further and helps you buy what you really need. Advertising aims to make us purchase things the shops want to sell. Don’t be the advertisers' victim: buy what you need – not what they need to sell.

• Always write a shopping list
• Think about whether you need or just want an item
• Find out where products are cheaper – for example, is it cheaper to buy meat from the butcher or the supermarket?
• Don't shop when you are hungry
• Watch for sale items and buy regular items in bulk when they are on special
• Think about the food you threw out last week and try to buy less and plan better
• Beware of the 'I deserve it' mentality when deciding whether to buy something
• Keep a little money aside to spend on a treat – but don’t go over this amount

Paying by EFTPOS or credit card can feel like it’s not really money. Keep an eye on the amount each time you use a card and imagine what that would look like in cash. Before you use credit, ask yourself:

• Do I really need this? Will it really make a difference to me?
• Can I wait until I have cash to pay for it?
• Is this the most effective use of my income?
• How will I pay off the credit card?
• What will it cost when the interest is added?

More info

BGF Financial Counselling

If you are living with HIV and are having trouble managing money, or are concerned about debts such as unpaid bills or credit card, you can get free, confidential help from a Bobby Goldsmith Foundation (BGF) financial counsellor. They can also help you with budget planning. This service is available to everyone with HIV, whether you are on a pension or working. Make an appointment by calling between 9.00am and 5.00pm, Monday to Friday.

Tel: (02) 9283 8666

Email: bgf@bgf.org.au

Web: BGF also produce a series of Factsheets that can help you take control of your finances

Consumer Credit Legal Centre

The Consumer Credit Legal Centre offers financial counselling information, advice and referral five days a week to consumers in NSW. Call the Credit and Debt Hotline between 9.30am and 4.30pm, Monday to Friday.

Tel: 1800 808 488 or (02) 9212 4111

Web: www.cclcnsw.org.au

Acknowledgements

ACON would like to acknowledge and thank Bobby Goldsmith Foundation (BGF) for their generous assistance preparing this information.