Balancing your budget

MABS - Budgeting

Do you control your money or does your money control you? Be honest! In today’s busy world, it can be almost impossible to keep oneself grounded with messages from advertising, the media and our community subtly influencing where we spend our money and what we consider essential for everyday living.

However, the responsibility ultimately rests with ourselves to decide what is most important to us, such as a roof over our head, electricity, heating and particularly to consciously make decisions around where our money is spent.

To assist in making these decisions, MABS advocates budgeting as a tool, a life-skill to assist us and prioritise our needs as opposed to our wants. The purpose of budgeting is to assist us clearly to see where our money goes, draw up a realistic plan and assist us make choices about what is most important to us and where it is best for us to direct our money in the future.

Budgeting is a cycle engaged over time, keeping a record of all spending, noticing spending patterns and looking at ways to creatively make the most of our money. A budget needs to be balanced, not too rigid or loose, prioritising needs but also allowing room for the unexpected and social activities.

The following is an example of a family addressing their budget and priorities:

Carol is married to Tom and they have two children. They live in local authority accommodation. Carol is working part-time and Tom is in receipt of Invalidity Pension.

They have two children Deirdre (22) and Caoimhe (16). They have begun to slip into local authority rent arrears and the Council sent them a notice to contact them regarding the arrears. Carol opened the post and is very upset on receipt of the notice.

Carol has always managed the bills, however, now that Deirdre is working she is finding it increasingly difficult to manage. Deirdre’s income is linked to the rent payment and she is not handing up any money, pushing their rent account into arrears. Deirdre is not making any contribution to the household as she wants to enjoy her first taste of freedom.

As well as that, Caoimhe has just hit the teenage years and she and her friends are starting to go out. She always seems to need new clothes, pocket money etc. Tom has been ill for the last three years and is confined to the house most days. He finds that the TV can be company for him during the day when everyone is out and so he increased the TV package to include more sports channels.

In order to tackle the situation, Carol has called a family meeting. She prepared before the meeting and worked out what each family member bringing in an income needs to contribute based on their rent portion, splitting the utility bills and contribution to groceries.

Carol explained the situation with their rent arrears and that if they do not address it now, they will be in serious trouble in the next few months.

Carol advised all of them to keep a record of their spending for two weeks, using MABS spending diaries and she explained that this would help them to see where their money is going, if their money could be better spent on things that could benefit them and to enable them ensure that they would be able to pay their contribution each week. They all learned from the exercise, particularly Deirdre.

Deirdre found that she was spending a lot on beauty products that she was not even using. Deirdre decided to considerably cut down on this spending and instead, treat herself to getting her nails done once a month and after her contribution to the household was made to put savings away for driving lessons.

Tom realised that he was not even watching a lot of the new channels. He has a few that he watches all the time and so he came to a better deal with his TV channel provider. Along with that, he has decided to cut down on cigarettes.

Carol’s challenge in this particular scenario is that she does not want Caoimhe left out with her friends, but there are too many expenses and a compromise has to be made. By involving Caoimhe in the family meetings, Caoimhe became aware of a budget, the process of budgeting, value of money and to look at what she really needed and to be able to compromise for that.

They agreed as a family to review the contributions in three months or if anyone’s circumstances changed in the meantime.

Every day we make choices that affect us. Where we spend our money really informs us where our values and priorities lie. The key is awareness of where we spend money and what we spend it on, our spending habits and supportive ways to get us back on track when our spending exceeds our income.

For further information on budgeting tools, please refer to the MABS website on or your local office on 076 107 2520.

By Eimear Guiney