First there’s the drawing up of a draft budget – detailing how much you think you’ll need to spend on various things. Then you no doubt look at the monies coming in and the debts you have stacked up and try to make it squish together so that it fits into your ‘ideal’ draft budget. It doesn’t. You make some changes, and finally everything is in balance. You’re saving 10% of your income, have a reasonable allocation for entertainment and home repayment. Only one thing stands the way of financial domination, the budget itself. You never look at it and so you never seem to stick to it. Your budget is a dead document.
So how can you revive your budget and put some life back into your personal finance?
Try this – rather than a budget opt to keep a running tally of your expenditure. Use excel or quicken to help you keep track. Yes much like an ordinary cash payments journal. Program your document to give you the running totals and also have your goals or budgeted amounts visible next to the totals of each column. This way you will be able to enter daily expenditure and and keep track of how close you are coming to your allocated budget for that type of expense.
If excel is not your cup of tea try quicken online or Mr.Miller’s Accounting Class notes – http://www.fhs.d211.org/departments/be/amiller/Accounting/Accounting.htm.
We are creatures of habit – don’t try to change too much at once. If you usually grab a latte before work – don’t cut out the morning caffeine – instead opt for a cheaper fix. Make your own take along cuppa or buy an ordinary filtered coffee that costs a bit less.
No more swiping. Get rid of credit cards. Out, Shoo, Be Gone I Say! Invisible magic money is easy to spend. Once I stopped using them, I wondered why I ever needed them in the first place. Breaking the habit will take some work but spending money you don’t have is an easy way of overspending your budget allowance.
Back to ‘no more swiping’ – I’ve also cut down on my debit card swiping too. Oh there’s always something that needs to be bought. I try as much as possible to say the words “I’ll buy it on my way out so that way I don’t have to carry it around. Right now I need to get what is on this list I made at home”. Yes I’m lying to myself and it works quite well. I’ve promised myself the item and my brain feeds me the usual pleasurable vibes I get from purchasing and off I go on my initial task. Of course I do this at 3-5 stores and at the end of the shopping trip I can’t imagine traipsing back to the store at all. Most of the time this tactic works and I have no idea why.
Keeping pocket money separate can help you budget. I withdraw about $200 every 2 weeks and that’s my play money. I keep it in cold hard cash because this way I have a physical sense of how much is there. The moment my wallet begins to lighten my hoarder instinct kicks in and I’m in saving mode. Ok, I’ll be a bit more honest – I really really want to go to the movies at the end of this week and next week, and if I’m frivolous I will have to stay home and miss out instead.
I’m not recommending you carry around excessive amounts of cash and place yourself in danger though. Never that.
Those are my ideas for the dead budget all of which I’ve put into play in my own life with successful results. Good Luck!
Written by Leanne Naidoo, LifeOrganizers Editor