Struggling to keep your head above the water is something many of us are currently trying to do and as things don’t seem to be getting any easier in the near future, I thought I’d share some budgeting tips I have tried to keep on top of our money situation.
Here are my budgeting tips:
1. It’s all in the mind
My first tip has nothing to do with money at all. A lot of your happiness is in your head. If you choose to believe that you are living in a situation of lack ie. you have a low-income and no ‘stuff’ then your happiness will be affected.
If you choose to believe that you’re still in the top percentage of rich people in the world then that’s going to considerably change how you feel about your position. There’s great pleasure in being able to tuck a child into a warm bed with a full belly. There are many parents out there that can’t do that so stop worrying about the holidays they haven’t been on and the toys they don’t own.
There’s plenty of time for all that later.
2. Control your money before it controls you
The worst thing in life is money trouble. It breaks up marriages and it causes untold anger, stress and upset.
It doesn’t matter how much money you have coming in the basic principle is the same. You can’t go wrong if you take off the amount you’ll need for your bills first and stick that in a separate account. I can’t tell you how much more relaxed your life will be knowing that all your bills are covered and you don’t have to think about it anymore.
With what’s left choose an amount to save, have this come off automatically. Spend and fully enjoy the rest.
3. “There is nothing left”
If after your bills there is nothing left, or worse still there isn’t enough to pay your bills. You have two choices cut back or earn more. From experience I recommend a combination of both. Cutting back is easy, you’ve heard lots of tips on that already. Earning extra money is also easy if you really need it. There are hundreds of ways to earn extra money and once you get into the right mindset it’s actually a lot of fun finding new ways to earn.
Lots of people will read and ignore that last bit because it actually takes a bit of effort. Don’t wait until you’re in dire straits to start scrabbling around trying to pull together extra cash. Start now and build up a regular additional income stream that will see you through difficult times.
4. Expect the unexpected
“We were getting by fine until the tv broke and we had to replace it”
“I was on top of the bills and then I remembered the **** car tax”
This is the sort of thing you hear recounted every day. You budget for the weekly/monthly expenses and then something ‘unexpected’ happens and it blows your plans.
Think for a moment. Is a tv breaking an ‘unexpected’ expense? Not really, your ‘stuff’ will periodically break. You didn’t buy your tv expecting it to work til’ the day you die did you?
Same with the car tax, that’s even worse as it’s a yearly expense. It’s not unexpected at all!
The key to managing the ebbs and flows of breakages and ‘unexpected’ expenses is;
a) make sure that your ‘bills’ includes those bills that come in yearly plus a budget for christmas. It comes round every year, don’t be shocked when it comes round again and you have no money for it!
b) Save an amount into an ‘emergency fund’, these are for the truly unexpected events ie flood, fire, theft, earthquake, volcanic eruption?!
5. Getting ahead
There will come a time when you get back up to two full-time incomes or your childcare costs disappear or your business takes off and you’ll have significantly more disposable income. The next step is to give yourself a bit more to play with but to use most of it to help you get a bit further ahead and realise your dreams.
Start off with saving for future cars and holidays so that you don’t have to take loans and use credit.
Now’s the time to make your ‘Bucket List’. This will give your new-found income some purpose, lack of purpose will result in frittering and ‘keeping up with the Jones” style competitions.
I’m no expert but these tips have seen me through both lean and lucrative times. My happiness levels have been much the same throughout.