Living on a budget can be a great way to save money. Especially when you spend a lot of time on your job and don’t have time to work on a side-hustle. If you moved to another town, living on a budget can be life-saving. You train yourself to live below your means.
This doesn’t mean that you have to get rid of everything that you like. It’s ok to give yourself a break and go to Starbucks. But it’s a problem if it becomes a habit. And it’s easy to fall into that trap. Spending a lot of money on a lot of things that you don’t need can make you have a lot of trouble in the long run.
Work on Your Mindset First
At the very beginning, you need to change your point of view. You might not be feeling very good about this. If you think budgeting will make you live like you’re a poor person, that’s not a good start. You will feel bad all the time because you will think that you’re missing something. Your fear of missing out will raise more and more every day. And that can lead to stress and depression.
Think about it this way. You’re building a skill that will make you more disciplined. You will spend less money, but you will always have what you need. And you will always have money in your savings account. If you start with a mindset that you have a lot of money and you’re choosing not to spend it, it will give you a feeling of power. You will feel more confident and capable of doing things. And you will wake up in the morning being happier than ever.
It’s important to spend some time alone and think about it. How does budgeting make you feel? Why does it make you feel that way? How do you want to feel about it? What are the potential benefits you will get out of this? Having a different and positive point of view will make the entire process easier for you.
Make a List of Your Current Monthly Expenses
Take a pen and paper and štart writing down everything that you spend money on. Try to remember all the little things. What spending habits do you have? Do you buy a lot of things in the market that is not on your shopping list? What are those things? Put them all on the paper. It’s much easier to think about it if you have it all listed in front of you. You will free your mind from unnecessary thinking and focus on the list.
If you are paying your bills a little bit too late, it can be a problem. What if you crash your car? All of a sudden, you’ll have a huge bill that you need to pay for fixing your car. And if you haven’t paid your bills yet, you have a problem. If you have a habit of paying your bills late, you can easily get even more of them.
If you don’t plan your expenses, you risk falling into the trap of buying more than you need. You should make another list to see what are your wants, and what are your needs. Everything that you need to survive and live a good life often doesn’t cost us a lot. We just have a habit of complicating it in our heads. Of course, you don’t need to order food every day. Even if you work the entire day and you’re coming home late in the evening. You can buy some groceries for two weeks ahead, and cook something by yourself. It doesn’t need to be a five-star restaurant meal, but it’s much cheaper and often healthier.
Build New Habits
To do this correctly, you should stop doing many things that you’ve done before. If you do everything that you’ve always done, you will get everything that you’ve always got. Good old quote. When in doubt, always come back to it.
Think about if you have any unnecessary subscriptions. If you work the entire day in your office, then you don’t need cable TV. There are many more things like this that you’re paying monthly and don’t even have time to use. And even if you do have time, you won’t use a majority of them. So put them all on paper and be honest with yourself. Do you need all that? It may be a great feeling when you get home tired in the evening and watch TV. You have 200+ channels to choose from. But do you need them? It all comes to that being a habit. Try reading a book. After a few months, when a book becomes a habit, you will probably sell your TV.
Think about everything that you pay month by month. There is a free alternative for almost everything. If you’re paying for an expensive gym and go there once a week, consider going to an outdoor gym. There are many outdoor gyms with bars and workout equipment. And you’ll be exposed to the sun and get some fresh air. These places are becoming more and more popular. You will often find them on many spots between buildings and city parks.
Do you have a monthly subscription to a local library or a magazine that you don’t read anymore? Or you’re paying to Netflix and don’t even watch anything. These are all unnecessary expenses. Once you start paying attention, you will realize how many of them you pay for. Cutting all the unnecessary subscriptions can save you up to $3000 a year.
Find Your Way of Budgeting
You can find many different pieces of advice on the internet. They might work for some people, but don’t work for others. Same as everything else. That’s why the best advice when it comes to something like this is to find your unique way. No one knows the best way to live your life better than you. You spend more time with yourself than everyone else does. But still, there are a few things you should consider. In 99% of places in the world, they still work the best.
First of all, you should have a savings account. Maybe you already live in an environment where having a savings account has become a norm. In that case, you already know the benefits. But if you don’t have one already, consider opening one as soon as possible. It will save you a ton of money in the long run. You can make a deal with your boss to immediately send 10% of your monthly salary to your savings account. This way you won’t even have to think about it. You will always have money on the side. And train your mind to resist the temptation and don’t touch that money, no matter what happens.
Now that you have a savings account, you are already paying yourself. You already have money on the side. Now it’s time to pay the bills. Always pay the bills at the beginning of the month. And if there’s an option, pay some of them in advance too. This will save you from feeling stressed about them. You won’t have to worry if you’re late anymore. And keep yourself out of debt whenever possible. You may need to buy some groceries, and maybe save another 10% in cash on the side. You will feel much more confident knowing that you’re not late, you’re not in debt, and you have money on the side all the time.
Keep Track of Everything
Let’s go back to our old friends, pen, and paper. Or, if you prefer digital, go with Google Sheets. Create a list of all the expenses and savings and keep track of everything. Compare it to your situation before you started budgeting and you’ll see how much you’ve improved. And once you start seeing the results month by month you will become even more confident.
Make a list of your results and celebrate the little wins. How much money did you manage to save compared to previous months? What else is different since you started budgeting? Do you feel more secure and stable? How much money did you manage to save by cutting your unnecessary expenses and subscriptions? Your progress will be visible very soon. And it will be a nice little confidence boost.
How to Stick with Your Habits?
Sticking to your new habits can be tricky. Especially if you’ve just started. You may feel overwhelmed. You may be saying to yourself that you are doing a good job and that you’ve deserved to order a pizza. This way you can easily fall into the trap of ordering food again. And this goes to all the different ones. So make sure not to reward yourself for the first 90 days at least.
Remember why you even started in the first place. Have the benefits of budgeting in your mind all the time. There is another good mind trick that you can use whenever you feel like ordering something. Feel the abundance of being able to buy everything that you need. You’re not creating an image of something that you don’t already have. You already have money to order pizza. The trick here is to feel the abundance of being able to buy all those things but choosing not to. And remembering your goals and all the benefits that go with them while doing it. This way you will become more disciplined and won’t have that temptation.