Welcome to 2024, where our life goals gets a facelift and our wallets...well, they try to keep up. At this point, the only thing more reliable than a New Year's resolution is the need to reboot our spending.

This week, we're rewriting the art of budgeting with none other than Jessica Irvine. You may already know Jess as one of Australia’s leading economics journalists ( Sydney Morning Herald and The Age ) and a best-selling author in personal finance. She’s been there, done that, and now shares her own financial learnings on Instagram (@moneywithjess) and weekly email newsletter, “Money with Jess”.

For this one, Jess holds the torch high for those struggling to save regularly with a unique system from her latest book “The Money Diary” . She guides us through expense-tracking and money-saving hacks that she has proven and tested in her own finances. We're also talking real, relatable, and sometimes hilariously candid budgeting stories that resonate with everyone, from penny pinchers to big spenders.

Why write "The Money Diary" where people can actually fill out their information?

Budgeting often gets a bad rap. It's seen as a chore – a generic and tedious thing to do. But in these times of soaring living costs, budgeting is having its moment as a tool for financial empowerment. So, Jess shares her wisdom in this colourful, easy-to-use financial companion designed to help you manage money with clarity and fun.

Back to basics

While everything is digitised nowadays, there's something refreshingly straightforward about pen and paper. "The Money Diary" embraces this simplicity.

It's a printed collection of worksheets, running from January to December, where you can track your spending and summarise your monthly budget. Sometimes, going back to basics is exactly what we need to turn budgeting more tangible and personal.

Why should we trust this method? Because Jess has used and perfected it herself. Her previous book, "Money with Jess: Your Ultimate Guide to Household Budgeting," laid the groundwork. "The Money Diary" takes it a step further, offering a real, physical space to manage finances. It’s the manifestation of her own successful financial management system.

A budgeting tool for the overwhelmed

For those feeling lost in their financial journey, "The Money Diary" offers a starting point. Jess's philosophy is refreshingly simple: start small, start slow. It encourages users to begin by simply observing and tracking their spending habits. This straightforward method is about making budgeting accessible to everyone, regardless of their financial literacy level.

Colorful, practical, and personal

Jess, a self-confessed paper-based gal, has always loved journals and diaries. This love shines through every page of her book – a far cry from the drab, intimidating spreadsheet. Her budgeting book aims to transform the mundane task of budgeting into something you look forward to.

Why does Jess prefer to track her budget manually instead of using an app or a spreadsheet?

Keeping it simple

Jess emphasises the importance of understanding the fundamentals of your finances – what's coming in and what's going out. Fancy spreadsheets and trackers might look appealing, but they can often overcomplicate the basic stuff.

Despite the plethora of apps and tools, Jess found solace in manually tracking her finances. She explains that while those tools are getting better, they often miss the personal touch and understanding that comes from manually recording every income and expense.

For Jess, manually tracking personal finances offers her a granular level of control. And when you think about it, this method aligns perfectly with the notion that personal finances is…well, personal.

Becoming the treasurer of your own life

Drawing parallels from her experience covering federal budgets, Jess suggests treating personal finances like a government budget.

She emphasises that, just like a government treasurer, individuals should track their finances with diligence and accountability. This means being aware of your income (revenue), capturing your bills and expenses, and aiming for a surplus (a.k.a. savings).

Jess admits that it took her until her late thirties to take a closer look at her finances. However, for the rest of us, the message is clear: it's never too late to gain control over your money. Knowing when bills are due and how much you have for investments gives a sense of control and peace of mind.

Monitoring and improving your financial health

Ana adds to the conversation with a vital point: you can't improve what you don't track. It's easy to overspend, especially during festive seasons or sales events, and it happens to the best of us. Without tracking and budgeting, these expenses can quickly derail your life goals.

How does Jess figure out how much to budget for each category?

Mindful spending over limitation

Instead of setting strict limits on each spending category, Jess advocates for a more watchful attitude. Picture a budget that’s less about enforcing limits and more about understanding where your money goes. In other words, it’s mindful spending that can lead to a more relaxed yet responsible relationship with money.

Forecasting, not just tracking

Interestingly, the episode highlights a similarity between personal budgeting and how the federal budget operates. It’s a combination of anticipation and adjustment. You start with a forecast, an educated guess of future expenses, and then adapt as real life unfolds. This method respects both the unpredictability of life and the need for some level of planning.

Pay yourself first

Tash adds the "pay yourself first" method to the list. This involves automatically directing funds to investments, mortgages, and bills, then responsibly using what's left. It simplifies money management and subtly shifts the focus to saving and investing, rather than just spending.

Gamify your financial habits

There's an element of play in how Jess manages her finances. She views each month as a game to see how much she can save or invest, while having a say on how to live life each month.

Budget fatigue and periodic reviews

Even the most engaging financial strategies can lead to fatigue. So, Tash shares how she shifted from active involvement in her budgeting to preferring automatic transfers. Yet, it’s a personal choice, with each method having its own merits. While automation is about simplicity, active budgeting can be more engaging and insightful.

Here, Ana brings in the vital point of reassessing finances, especially as life changes. From renegotiating utility rates to adjusting spending habits, periodic reviews ensure your budget reflects current realities.

How to train your brain to save more money

Think twice before you write

You've heard it before: "Watch your spending." It’s common advice that gains real power when you actually pause to rethink a purchase. This is where the magic of writing down your expenses comes into play. It's a surprisingly simple but effective strategy for reining in impulsive buying.

Imagine you’re in line for that extra cup of coffee. You’re thinking, “Another one won’t hurt.” But then, you remember you need to record this expense. Suddenly, this moment of reflection makes you rethink whether you can’t go on without it.

And it's not merely about forgoing a Frappuccino. You’re cultivating mindfulness in every aspect of your spending. Just because you can buy something doesn’t mean you really have to.

Share your spending

Ready for a next-level challenge? Share your spending with the world. Jess once did just that, posting every purchase on Instagram.

While not for the faint-hearted, this method adds a layer of accountability to your spending decisions, forcing you to confront your habits head-on. It's a bold move, yes, but it underscores a crucial point: awareness is key to change.

Accept and adapt

Money management isn't a straight line. It's a winding road with its share of ups and downs. As Jess delves into the stages of change model from psychology, we're reminded that relapse is part of the journey.

Whether you're tracking spending or budgeting, bumps along the way are inevitable. The key? Don't be too hard on yourself. Begin with small steps, like noting down daily expenses, and build from there.

Unpack your money mindset

Our emotions around money are complex and deeply rooted. Jess suggests cognitive behavioural therapy techniques can uncover your financial thoughts and feelings. By identifying thoughts like "I'm bad with money" ( which we covered in a past episode. ), you can start reshaping your relationship with finances.

Being street smart with money

Savings don't always mean drastic cuts here and there. The key is to focus on two variables: the price of what you consume and the quantity.

For significant savings, start with the "big rocks" in your budget like energy and insurance. Shopping around and negotiating better deals can lead to substantial savings.

Then, start asking yourself whether it's cheaper to use dishwasher tablets or powder. Or have you considered using less shampoo? These might seem like small changes, but over time you reduce unnecessary consumption and the savings pile up.

Money saving story that Jess is proud of

While the rest of us have been feeling distressed by rising energy costs, Jess was already looking at a goldmine for savings. She armed herself with pen, paper, and determination, dissecting rates per kilowatt hour. The result? Hundreds of dollars saved and a newfound excitement for what many consider a dull chore.

But what if you're in a place like Perth, where options are limited? In regions with a single energy provider, the typical advice to "shop around" hits a dead end. Sometimes, the key to saving isn't about switching providers but about smarter usage.

Ana shared insights on how even the tiniest adjustments can lead to significant savings. Running appliances during off-peak hours or leveraging solar energy are just a couple of examples. These small shifts are effortless, yet their impact on your wallet is anything but negligible.

And it's not limited to energy bills. Ana dropped another pro tip: negotiating your mortgage rates. Imagine getting a 0.6% reduction on your mortgage. It sounds so small, yet real savings often lie in the "big" things you use daily.

What are some of the best ways to manage your money this new year?

A simple start: track your spending

Are you ready to step into fresh start for your finances, but you're unsure where to begin? It might sound basic, but as Jess shared, the act of tracking can be transformative.

Whether it's jotting down expenses in a notebook or using a digital tool, observing where your money goes is a crucial first step. Start with a baseline, understand your current habits, and then set the stage for intentional change.

Observe and adapt

With rising costs and challenging markets, it's easy to feel overwhelmed. So, before you rush to make drastic changes, take time to observe your current financial situation.

Don’t be too hard on yourself if you can’t save or invest as much as before. The goal is to be mindful, not judgmental. Your financial journey is unique, and you’re making the most reasonable choices within your current circumstances.

Goals – big or small, they matter

Setting financial goals doesn’t need to be about lofty ambitions. It's okay if you're not aiming to pay off a huge chunk of your mortgage or save a fortune overnight. What's important is to set attainable, realistic targets.

Can you reduce your mortgage a bit more this year? Or perhaps start a $20 investment? Maybe it's as simple as being more mindful about your spending or aligning your expenses with your values. Remember, the best resolutions are those that lead to sustainable habits.

Align spending with happiness

At the end of each year, take a moment to reflect. Look back at your photos and memories. What brought you the most joy? You'll likely find that happiness often resides in life's simpler moments.

Jess reminds us that our money represents more than just currency. Your money is your life force. A reflection of the time and effort we've invested in earning it.

Therefore, choosing where to spend should be a deliberate decision. It's respecting the work we've done and ensuring our spending brings genuine joy and satisfaction.

Where to find Jess and her book "The Money Diary"

You can find Jess on Instagram (@moneywithjess) , where she regularly shares tips and insights. There, you'll source direct links to resources including her popular book, "The Money Diary". Budgeting worksheets are also available in PDF format on Jess' website if keeping it paperless is your style.

In this together…

If this chat with Jess sparked new ideas or motivated you, we'd love your support to help others in their journey to building wealth. A five-star rating, a thoughtful review, or even sharing it with a friend can go a long way.

And if you're just beginning to learn about long-term investing, make sure to check out our first 10 episodes for a solid foundation. To keep the conversation going, follow our podcast @getrichslowclub , and don't forget to check out Tash at @tashinvests and Ana at @anakresina .

Happy investing!

Tash & Ana