People often think that personal finance budgeting is something scary, something that needs to be approached with fear and dread. But, fear no more! Whether you are currently in debt, or on track but just can’t seem to find the money for the things you really need – note, I said need, not want – there is one simple step to getting rid of all your troubles. No, I’m not talking about throwing your budget out the window. What you really need to do is examine where your current income is going.
Everybody knows how much they make. We take jobs largely based on how much they’ll pay us and we make a mental note of how we’re going to use that money even before our first cheque has been deposited into our bank account. Now, there is nothing wrong with that. Indeed, thinking about how we’re going to spend our hard earned salaries is one of the things that gets many of us through our long workdays. What is wrong, however, with making a mental note of our spending is exactly that – it is mental.
No matter how clear we are in our minds about where our money is going, I bet every single person out there would be shocked to see the reality as it appears on paper. You think you’ve only spent one third of your disposable income on eating out, but what about that quick trip you made to the ATM in between dinner courses two weeks ago? Or the $50 you spent while just ‘window shopping’ last week?
One of the simplest ways to improve your personal finance budgeting is to first make a note – not a mental one – of all your spending, and I mean all your spending. The only way to discover where you are needlessly wasting money is to document where each and every dime is going. Little insignificant purchases might not seem like much at the point of sale, but they add up over time.
Once you’ve outlined all of your daily, monthly and yearly expenses, you will need to look at what you can cut from each of those categories. For instance, if you’re spending a lot of money renting videos each week, could you check out what the public library has in stock and borrow movies for free? Or, if it’s something more serious, if your electricity bill is eating up a large share of your income, why not look into using energy efficient light bulbs, or installing a ceiling fan? Also, are you remembering to turn off your lights and TV when you’re not using them?
You don’t need to reduce all your bills all at once, but rather start slowly. The more quickly you try to change your habits, the higher the chances you will not like the process. From thereon out, trying to reduce your costs will be seen as nothing but a burden and a painful process.
Personal finance budgeting does not have to be a complicated thing. Indeed, saving money can be – dare I say it – simple and fun in the end.
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