Money. It evokes different emotions for different people. We’ve heard of the good and the bad about it. We can never agree on many things about money. But I’m sure we can agree that we have to budget before we spend it.
And we have to adopt budgeting not just as a one time thing, but something to do for the rest of our lives if we are to enjoy a simple healthy lifestyle and not have money as an issue.
Remember: We all have a relationship with money. Whether that relationship is good or bad is entirely dependent on us. Creating a budget for your money ensures a good relationship with money. Creating a budget ensures you never have to worry about misusing money or not being able to track your spending.
Money was never something I drooled over. That was my sister’s department. For me, from as long as I can remember, money was just a valuable resource we used every day. It wasn’t something to be loved or hated, just something to be used. And like all the other resources like water and air, money was to be used with respect.
I have to admit that seeing the need to budget didn’t come to me until I was much older. Even then, I had trouble putting it to work. It sounded easy to say: budget for your expenses before you actually incur them. But to actually do it was hard.
Everything takes practice, and patience. And I employed the same for learning how to budget and be successful at it. I’m still practicing, but I feel like I’m at a point where I can say I know where my money is going and how to best manage it. Let me share with you some tips.
Tip #1: Be determined to learn how to budget and be successful at it
That’s right. That’s a tip. You can’t hope to accomplish something if you are not determined to. And being determined doesn’t take a lot of action. It’s a decision, a decision that happens in a nano-second. You decide right here right now: I’m going to learn how to budget and be successful at it. There you go. You are off to a good start.
Tip #2: Know your expenses before you incur them
You can’t budget for something you don’t know. You have to know when your kid’s school fees will be due and how much they’ll be so you can budget for them.
Now, you can’t usually foretell what your electric or water bill will be, but you’ve paid them before. So go through your past bills to get a feel of how much you’ve been paying.
Then for this month, though you’ve been using your utilities at pretty much the same rate or quantity, make that estimate a little bit higher just to avoid surprises.
I’ll give you an example. If your water bill has been around $11 for the past three months, when you budget, put it as $15. That’s so you can cover any unexpected rise. If you end up paying $15, then that’s great because you budgeted for it. But if you end up paying that $11, it’s also great because you get to spare $4.
Tip #3: Cater for contingencies
This takes off from Tip #2. Always cater for the unexpected, just like in the tip above. But taking it farther, put money aside for whole expenses that don’t occur often, but are likely to come up.
For example: Put money aside in case your electric kettle suddenly quits on you. Or in case a relative calls asking for emergency money. By budgeting for contingencies, you have peace of mind to take care of unexpected expenses and not feel the brunt of that spending.
Tip #4: Cut out unnecessary expenses
And I’m not talking about contingencies. I’m talking about expenses for the things you don’t really need. Do you really need that fifth pair of shoes? Do you really need to buy that scarf that’s on sale?
People are misguided in thinking that when they buy something on sale, they get a bargain and therefore save money. No, they don’t. They still waste money on something they don’t need, even if it’s at a discount.
Stick to only what is necessary. We are trying to enjoy a simple healthy lifestyle so we are trying to avoid clutter and be minimalists. So avoid stuff you don’t need and put that money toward something you really need.
Tip #5: If one item makes you go over your budget, then cut back on the other items.
Maybe you budgeted $500 for medical expenses, but then they go up to $700, look carefully at your whole budget and identify where you can cut back to cater for that extra $200 in expenses. Reduce your groceries by maybe cutting back on your snacks, or bottled water, something to help you not overspend.
Tip #6: Keep all your budgets in one place.
You are entering July and are done with June’s budget? Don’t throw it away. Neatly file it away. And don’t stash it in that cupboard until you can dispose of it. No, go back to it time and again as you move along with your budgets for the following months. Learn from your past mistakes and successes.
Tip #7: Budget to put some money in your bank
That’s right. Don’t let your budget be about spending and exchanging your hard earned money for goods and services. Put some money into your savings account and invest it. This way, budgeting is working for you and you are more likely to carry on with it now that it’s helping you build your net-worth.
The final word
Learning how to budget can be hard at first. But only for as long as you want, and it’s as hard as you want it to be. Anybody can budget, including you. If you learn how to budget and be successful at it, you’ll feel more peaceful, more in control, enabling you to enjoy your simple healthy lifestyle.
Thank you for reading this post. We definitely need more tips so please share with us how you budget by commenting below. Thank you.