Bleeding money?
It’s because you don’t have a budget in place! I know budgeting sucks but if you want to keep on top of your finances and avoid the dreaded debt trap it’s time to wise up. Follow this bullet proof budgeting plan designed to mobilize your moola, cut wasteful spending and ultimately keep you clear from costly credit.
Step One – Attitude Shift
We don’t like budgeting because we feel deprived. Suddenly we need to consider how we spend our bucks and that’s not cool. “Dude I work hard for my money, I’ll spend it the way I want to!” Sound familiar? Change your attitude towards your money and the budgeting battle is almost won.
Step Two –Build a Budget in 15 Minutes
Trust me it’s simple. Forget paperwork and snazzy sophisticated software programmes. At the end of this article download our cool personal budgeting spreadsheet – It works. Start by inputting your proposed monthly expenditure. Do it on the day you get paid before you start spending, or paying bills. Input the biggies first. Your fixed monthly expenses should include your mortgage, vehicle repayment, insurance, etc. Now input your variable expenses like what you spend on entertainment and hobbies. Here is the catch – don’t put any random amounts into your proposed budget. If you are likely to spend a whack of cash on a Tequila blitzed bachelor party that month, think about what it’s likely to cost you and make a more realistic estimate.
Step Three – Work the Budget
You’ve got your proposed budget, now stick to it like you do your gym routine. Work the plan! Be conscious of what you’ve allowed yourself in terms of spend. If you’ve allocated R2500 to entertainment that month, don’t hit that extra Jol that’s going to cost you another R500 bucks when you know you’ve burnt through your entertainment allocation already.
Step Four – Balance the Books in 20 Minutes
At the end of the month, pull up your budget and reconcile. This is your actual spend during the month and it’s time to balance the books. Successful businesses do it, so no excuses. Try and run all your expenses through one bank account and avoid cash transactions. It’s tough to remember what you spent your money on when you’ve drawn too much cash out of ATM’s. Print out your bank statement and get cracking on inputting the data into your budget sheet. Now you’ve got a snap shot of your month and it’s easy to see where your money went to.
If you’ve overcooked the budget, no problemo…
The important thing is that you are aware of it. If you stick to the process, in a few months you’ll get a pretty good idea of what’s going on with your personal finances and you will be back in control.
Step Four – Stash Cash Account
This is my top tip because it works for me. When life throws you a curve ball, and you don’t have some money stashed, you dip into the credit that’s readily available to you. Am I right? You know I am. You can’t plan for the unexpected and when it happens it’s going to blow your beautifully built budget out of the water. Put a small amount of money away each month. Let’s call it your “stash cash” account. Next time you are hit with an unexpected expense you didn’t budget for, guess what, you pull it from your stash cash account rather than whacking it on the plastic. R500 bucks a month, gets you R6000 in a year and trust me, you’ll be glad you built up that little “get me out of jail money”.
That’s the whole enchilada. Now download that budgeting sheet (It’s 13th from the top!).
If you need any help with your personal financial planning or insurance, feel free to drop us a line.
Until Next Time.
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