Spring is here! So why not take the new growth that is appearing on plants and trees all around us as inspiration to make a fresh start on your money habits too?
A habit that certainly needs the new-leaf treatment is living from payday to payday or, even worse, having month left at the end of your money. In most cases, this habit comes from not planning or not following the plan you did make – and by “plan” we mean your budget.
Not having a budget is the worst possible way to deal with your finances. Without a budget, how do you know what your money needs to do for you? Equally bad is to have a budget but not using it when you start spending your salary.
Are the R49-oatmilk cappuccinos that you get every so often in your budget? If yes, then go ahead and enjoy them. If not, ask yourself what you are not doing with all those R49s.
Just 10 cappuccinos get you to almost R500, and you can do a lot with R500 (even with how expensive things have become). So often this is what we forget: small amounts add up to big amounts, and by not paying attention to the small amounts you rob yourself of the opportunity to do something big with the big amounts.
Let’s look at how to end this vicious cycle and what you can do to put yourself on the front foot financially.
- Change your mindset
Yep, that’s where it all starts: you have to think about money differently. You have to commit to budgeting, expense tracking and saving, otherwise it will never happen. Just agreeing that it sounds like a good idea is not enough. You actually have to make the commitment and do the work. Stop thinking that you can only plan when you have enough money – you will never have enough money unless you plan.
- Find a way of budgeting that works for YOU!
Monthly budgeting can be overwhelming and seem unattainable, especially when you are new to actively managing your money. It might help to narrow things down by dividing the monthly amounts into weekly amounts, especially for things like groceries and transport.
- Track your spending
When you don’t know where your money goes, you can’t decide to spend it differently. Tracking your expenses consistently will give you an accurate spending picture and help you understand what you want to do with your money.
- Cut down frivolous spending
This can be a tough pill to swallow but an essential one if you want to get to financial stability and freedom. One way to do this is by slowing yourself down – when you want to buy something, wait one week to see if you still think the purchase is really necessary and worth the money.
- Hunt down the bargains
Bargain hunting can be fun, especially when the savings start piling up. Yes, it takes some time and effort, but the rewards are worth it. For instance, instead of buying cheap new clothes that fall apart after the first wash, look for good-quality stuff in thrift shops. Also spend some time browsing grocery stores’ apps to see what specials they have and plan your meals and shopping accordingly. The only danger with bargain hunting is that you could buy items you did not budget for because of a possible bargain. Discipline is the key to financial freedom.
Challenge yourself this spring to do things differently – but also pace yourself. Take it one day at a time. Changing habits is a process that requires thought and preparation.