With the uncertainty of the current financial climate, it is absolutely crucial to improve your spending habits. There are many things that need to be considered when you start budgeting, and the entire thing itself can be overwhelming. It really comes down to what works for you and your goals, but here are 5 things to keep in mind once you do start.
Think about your relationship with money.
If you feel like you’re always broke, you will always be broke. We have been conditioned that we go to school to get an education then get a job and then start buying things and paying bills. Right? Think about the first thing you do whenever you get paid; do you immediately think about all the things that you have to pay for? What sort of relationship did your parent(s) have with money? Are you repeating patterns? Take control of your relationship with money; after all you should be in charge, not the other way around. It is, after all, an income, which means that money is coming to you. Think about your past relationship, your current relationship and what you want to change about your relationship with money.
Ask yourself important insightful questions.
Why do you feel that you need to start budgeting? did something change? Were you recently laid off and haven’t found a new role yet? Do you want to get out of debt? Do you want to get a handle on your finances and stop living paycheque to paycheque? Is there a big purchase (eg: house, car, trip) that you’d love to make? Are you thinking about your future (eg: kids, retirement)? The more that you can zero in on why it’s necessary to start budgeting, the more realistic your goals will be.
Make a plan that you can stick to.
When it comes to spending, it is important to know where every single cent goes. Yes, keep track! It can be tedious, yes, but you’re trying to get things under control. Once you regain that control, you can loosen your reigns. But getting a handle on your spending, means getting a handle on your spending. If you didn’t plan for it, it can wait – unless of course it is a emergency! This would also be a good time to consider if you need support; but whatever it is make sure it is something that works for your needs. Be grateful, picture things you would do if you could afford it and set realistic goals.
Think before you buy: want vs need.
When you start budgeting, shop when necessary and always think “want” vs “need”. I like to do what I call “window-shopping”: if you’re at a store and see something that you don’t need but really want, pick it up! Walk around the store with it as you continue shopping, all the while asking if it’s a want or need. Picture your life walking out of the store without it; does your life change? The more time you spend with it, the more you realize that you can live without it. The next thing you know, you’re putting it back. If you just can’t stop thinking about it, reward yourself with it at a later date. If it’s gone, it wasn’t meant to be and guess what? Your life will go on!
Reward yourself and still have fun!
Don’t take the fun out of your life when you start budgeting, that can be a recipe for disaster. All you’d need to do is plan better for something fun. If you want to go out for dinner or to an event with a cost, plan for it. Allot the money the same way you’d have to allot the time. If you didn’t plan for it, there’s always next week or month. Put a little money aside (even if it’s $5) with each pay specifically for your social life. Reward yourself; that self-care is important.
Bonus Tip! Be honest with yourself; ask for help if you need it.
Managing your finances is a daunting task that, if many of us can be honest with ourselves, we avoid it for that very reason. You may not how or know where to start, and then that leaves you feeling frustrated, stuck and afraid. Well, the good news is that there are people who are trained to understand cash flow and make it fun! One person that immediately comes to mind is Hadriana Leo, Money Navigator. I’ve attended her workshops and she really simplifies the process while helping you understand your Money Mindset. And yes, she makes talking about the dreaded M Word fun. Don’t hesitate to reach out.
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