Remember that feeling of elation you used to get when you got your first ever pay cheque? I was a bartender, and even though the money was sadly a pittance, I remember how important, valued and powerful I felt when all my hard work was magically converted into cold hard cash in my bank account. Of course it was all wasted within a few days, but that wasn’t the point! Now that I am older, and the world fights its way through various economic crises, I recognise the sad truth of life. That love may make the world go round, but money is what keeps the lights from going out.
Don’t get me wrong, having less or more money is not a bad thing. The problem we have is that there is a certain kind of depression that comes when you don’t have enough to satisfy all your wants as well as your needs. How many times have each of you wanted to do something amazing only to find the path blocked by a lack of funds? My guess…. all of you! So let's talk about how we can save a little money to keep us all happy and healthy in a world where we can't predict what's coming.
One of my favourite books, the aptly titled ‘Secret Dreamworld of a Shopaholic’, approaches the problem of low cash flow with a simple little idea. You can either make more money, or you can cut back on your spending. I think we would all love to be in a position to earn more money, but for some people that isn’t a possibility. So that leaves us with cutting back, which for some is just as hard.
In my experience, the most successful budgets are like the most successful diets. You can’t simply stop spending money, anymore than you can stop yourself wanting to eat. The key is to separate what you need, and what you want. The things you need are money for food, and money to pay your bills or mortgage, so first things first, look at your monthly income, and look at how much your bills come to in a month. When you have a total, just deduct the outgoing from the incoming and what you are left with is where your budgeting skills begin to shine.
Now its important not to take your saving goals to the next extreme and completely cease to indulge yourself. If anything, it will make the process harder, and if you are like me, telling myself not to do something only makes me want to do it more. So when you have your remaining pot of money tell yourself how much you want to save in a week or a month. Setting a goal is important because this gives you a result that you can work towards, and as you get closer to that target, it makes you feel you are in control and achieving something. I am not saying this is fun but it does help you stick to your own budgetary rules. You can either squirrel your savings away, or open another account and watch your savings pot grow every time you add to it.
So now we have the remainder. All the bills are paid, and your savings are secure, and you will see that you are probably not left with very much. It is so easy to be disheartened when you look at this very small amount of cash, and I honestly feel for you. That being said the time has now come to plan your budget and this might help you feel a little better about the state of your money.
Think about what you do in a month, and think about what you buy. Do you go out every weekend? Do you indulge in impulse purchases when you go out shopping? Do you like expensive meals in fancy schmancy restaurants, and do you find yourself being generous to your nearest and dearest? It’s a lot to think about, but it’s all about thinking where you can pull back the expense to give yourself more control in the long run. Try and think about what you spend as well. This makes it easier to plan yourself around your budget.
When you have gathered up all your ideas, the time has come to put together the budget, and an honest and achievable amount for how much it will cost to do the things you want to do. I say honest and achievable because people have a habit of convincing themselves that they are capable of especially massive savings that they just cannot maintain. For example, you can try and convince yourself that you can go on a night out for £20. That may be possible for some people, but its easy to forget all the additional costs that come from a night out, like taxis, entrance fees to bars and clubs, and buying drinks for someone special who you just happened to meet. Then try and put things into categories that make sense to you, for example set aside £100 for your nights out in a month, or £35 for books or DVD’s etc. The key is to make you feel as if you are living your life as normal, and the budget should be the guidepost that controls your money without controlling you.
When you have your budget drawn up, then you need to learn to be firm and try your hardest to stick to the rules that you have set. This is why I recommend writing them up yourself since only you know all the things you can want and need. The last thing to remember is simple, and that is to be patient with yourself while remembering that the occasional slip up is not a sign of weakness, more a sign that you need time to adjust to your new commitments.
Before I leave you to work out your new budgets, I will leave you with a little something to think about. Earlier, I encouraged you to think of being on a budget, like being a diet. One common theme with both of them is the desire to make a change for the better, and sticking to that change as much as you can. How successful you are will relate directly to how much you want to achieve your goals.
Until next time you sexy beasts, this is Jason, watching the pennies, signing off.
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