How to budget if you are a spender

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Taking control of finances takes determination, rules, and tricks for our brains.

Determination

The desire to keep the budget right and the decision to make it happen are not the same thing. Many people want to save, eat right and exercise, but few find the determination to do so. It arises in a desperate situation or, less often, from the understanding that it is no longer possible and something needs to be changed. If you're serious about it, get ready to take action.

rules

You can't do without rules, even if it's just a small ritual, for example, putting change in a piggy bank or putting checks out of your wallet once a day so that you can immediately pay expenses.

1. Optimize your finance accounting

Budgeting is based on the same principle as weight management: count. Only instead of calories - money.

Calories accumulate imperceptibly during the day: ate a cookie, a snack on a sandwich, threw sugar in tea, at work treated him to a candy or two - and 400 kilocalories have already run up. Money is the same.

Petty spending is the scourge of the private budget. But, like excess calories, these expenditures often do not fit into the daily norm.

The right tools can help you keep track of small expenses. No need to keep a table or fill out a notebook. Install a budget management app on your smartphone. We need one that has a connection to banks and e-money systems, so that these costs can also be analyzed by category. For example, Zen Mani, CoinKeeper, Home Bookkeeping.

The app is more useful than a notebook and tables for a number of reasons:

• If you pay mainly with a card that is linked to the application, then the unaccounted for costs will be less.
• The application simplifies budget management: less manual work, visual presentation of information, ready-made statistics of expenses for different categories.
• In the app, you can set a daily limit and get reminders to help you stay on budget.

If your financial accounting apps haven't caught on, use the piggy bank trick. A piggy bank can be a card or a glass jar. Received a salary - spread out on the piggy banks: for an apartment, for food, for travel, for education, for entertainment. And do not get into other piggy banks if one runs out of money.

2. Appoint a treasurer

If you have a family, budgeting is more difficult: you have to constantly ask who spent how much and on what. The first rule solves this problem, but another one remains: who will have control over the family budget?

You need to honestly talk with each other: which of you has more cases of regular unnecessary spending, he will have to transfer control to your partner. Note that you are not giving away the right to spend money, but the ability to keep track of and budget.

Agree on limits and spend peacefully.

If you do not trust your companion, then it is difficult to talk about one family budget, you need to keep two - personal and general. If you live alone, you have to deal with everything on your own: there is no choice.

3. Don't spend more if your income has grown

This rule is considered very important by financial trainer and entrepreneur Bodo Schaefer, author of the bestselling book The Path to Financial Freedom.

As soon as income rises, we strive to reward ourselves and buy more things than before and more expensive. “Because I can! Didn't I make money for this? The car is more expensive, a new smartphone, another cafe, shops with a higher average check. The trap is that incomes have not grown at all, despite the increase in wages. We ended up where we were before.

4. Carry cash with you

Physical money is harder to part with than virtual money. Carry some of the funds in cash, and best of all - one large bill. Bodo Schaefer claims that this teaches us not to be afraid of money, to feel comfortable with it, to trust ourselves. We train discipline and our subconscious mind, which will help us earn money if it feels that the sight of money brings us pleasure. Just put the bill in your wallet.

Place it separately from other money. She is an emergency reserve. Just as dumbbell exercises train muscles, this note will train your subconscious mind to get used to the concept of wealth.

Bodo Schaefer financial coach

Tricks

These are gimmicks for your brain. They will help you not go crazy with the thought that you are involved in something difficult, and keep the budget with joy.

1. Take control of money easier

It is not at all as difficult and scary as it seems. Imagine that this is a game with a reward at the end, because, in general, it is.

2. Connect the kids (if any)

If you have kids growing up, tell them how you budget and become an example of financial behavior. After that, it will be a shame to retreat.

3. Postpone the purchase

Let's say you have some free money left at the end of the month. It's tempting to reward yourself for good budgeting and spend the extra money. Just tell yourself, “I'll put this money aside for now, there's no need to rush. I am doing well and, of course, I will spend it, but a little later. Perhaps this place in the drawer under the documents will do. Believe me, after a while you will like having a supply of money and you will not want to part with it so easily. All accumulations usually begin with this.

4. Flip the logic

Allow yourself any regular petty waste. Small expenses are most often impulse purchases, they cause damage, but only if there are a lot of them and you do not notice them. The trick is that you officially allow yourself the extra spending and put it into the plan. They are part of your controlled budget.

What awaits the one who has ceased to be a spender

When you start counting money, at first it seems that there is little or no money at all. But then the situation changes for the better, because you are now in control of the situation. Don't quit right away, keep playing, and don't back down.

Working together on a family budget unites and gives partners the opportunity to get to know each other from a new perspective. This is a good way to build trust in a relationship. Support your partner, share your experiences in your financial game.

Remember that your job is to keep a budget, not save on everything.

As soon as you, albeit with a small margin, have enough money before your paycheck, you will immediately see how much freer you are thinking about your finances. You can now think about investing in your education, you have stopped reproaching yourself for spending and are no longer afraid to be left without a livelihood. Now you can think about savings and investments.