There’s
plenty of misconceptions that budgeting is something people with wealth do not
do. On the contrary, people with wealth are most successful because they are
smarter with their money in many cases, and budgeting is one of the smartest
things you can do with your own money. This kind of mindset should be instilled
as soon as possible, and it’s never too late to try and be smarter with your
hard earned cash.
Many
people also have a negative view of budgeting, seeing it more as a chore. It
can be especially difficult if you’re no good with numbers, and feel like the
process of calculating funds regularly would be hellish. However, there’s
plenty of ways to make this process easier and make a habit of budgeting
properly for prosperity.
1: Define Money Purposes
One of
the first things you should do with your money each month is divide it into sub
categories. From your main funds, decide how much you need for crucial expenses
such as bills, car payments and rent, and make sure you set it aside. This is
obviously deducted from your overall monthly expenditure, and will ensure you
have enough money for important payments.
This
should be done as early in the month as possible, and doing it regularly will make
sure you never overspend and leave yourself in a difficult financial position. This
method of budgeting can also help you save money for many other purposes, such
as monthly savings or a future purchase that you’re working your way towards.
2: Hoard Cash
I’m
the sort of person who never really uses cash, however in some situations it’s
unavoidable to receive. Therefore, whenever you have some cash, including notes
and coins, save it up instead of succumbing to the very natural temptation of
spending it.
This
can serve as a form of backup or safety net should you ever need it. You will
be surprised to see how quickly a cash hoard can grow, and using this in tandem
with your monthly savings will help preserve it for longer, as opposed to
chipping away at your saved money whenever a small and unexpected, yet
significant payment arises.
3: Avoid Credit Cards
Credit
cards allow you to spend money that you don’t actually have, and whilst the
prospect may be awfully tempting, it should be avoided at all costs. I’ve heard
many stories in my time of regret, such as from friends who overspent in their
youth and are still paying for it years down the line. Until you have control
of your expenses and you’re budgeting comfortably, a credit card should not
even enter your mind.
This
also goes strongly for all other forms of credit, such as payday loans or ‘buy now, pay later’ schemes. All of these serve
to benefit the companies which define the terms, and as such, it’s almost
certain you’ll be paying back far more than you owe in the future.
4: Use Technology
If
you’re bad with the numbers like me, technology can provide a sound avenue to
better money management. In particular, the rise of mobile technology has made
budgeting on the go much simpler, meaning you can track your expenses easily
with a wide range of financial apps. Having these capabilities at your
fingertips makes a huge difference. Prominent budgeting apps include Mint,
PocketGuard, Wally, and Level Money.
If
you’re looking to go deeper than this and really plan your spending for the
foreseeable future, budgeting and forecasting software for desktop use can be particularly
effective. This is more suited for self-employed individuals, or those whose
professional lives overlap widely with their everyday, personal lives.
5: Avoid Frivolous Spending
The
rest of your expenditure should qualify as want, as opposed to crucial need.
These are things which we can do without, but nonetheless improve the quality
of our lives and help us enjoy the benefits of our hard earned money. This can
include new clothes, holidays and travelling, dining out, and any other
leisurely pursuits which can be put on hold.
Regular
pursuit of these luxuries might seem harmless at first, but they can soon pile
up and ultimately cause financial woes. I wouldn’t want anyone to give up on
the things that bring them pleasure entirely, because that would just end up
causing misery. Instead, regulate your spending in these areas and always
ensure the rest of your monthly budget is in order.
Comments
Post a Comment