If you are like me, the beginning of the month is a great time, financially speaking. It seems that every month, I resolve anew to make my budget work by living within it! I cannot say that I know where all the budget busters and money leaks are in my finances. What I can say, however, is that being more deliberate about all aspects of my spending does help make my budget more successful. Read on to learn more about some of the secrets I have discovered for spending money deliberately.
1. Be honest about the difference between your needs and your wants. In today's world, necessities include BASIC food, BASIC shelter, BASIC clothing, BASIC transportation and BASIC medical care. Everything else is unnecessary. By concentrating on providing yourself with these BASIC things, you can discover the absolute minimum amount of money that you need to live on.
2. Use a written budget. Trying to remember what money you have coming in and what money you have going out and when certain bills are due is virtually impossible unless you use a written budget. Your budget does not have to be long and complicated but it does need to be useful. Make it something that makes sense to you and that includes ALL your incoming money as well as ALL of your outgoing money. There is something powerful about seeing your financial picture in black and white (or red as the case may be) that makes you pay attention to what, when and how your money is spent.
3. Make spending inconvenient. If you have to be deliberate about where and when you spend money, you will be more deliberate about what you spend. For example,
- Remove your credit cards from your wallet. Not having them with you will mean that you have to make a decision about purchasing something before you go. Consequently, you will not be tempted to buy something impulsively just because you know that you always carry your credit card.
- Implement an "envelope" or "cash" system. This is a money management system with built in spending limits. You assign a specific amount to each spending category at the beginning of each pay period. You actually have an envelope with the specified amount of cash in it. Any expenses from that category are paid for with the cash in the envelope. When the cash is gone, there can be no more spending in that category until the cash is replenished with a new paycheck.
- Declare "no spending days". Look at your schedule and decide that you will have 1 "no spending day" each week or each pay period. On this day, do not spend ANY money. That means no purchases of any kind! You have to eat and drink what you have in your house; you don't buy anything online or over the phone; and you do not charge anything to any credit cards. In other words, spend your TIME and not your money. As you feel comfortable, increase the number of "no spending days" you have and see what kind of savings you can create.
4. Plan your menus (and your shopping). Buying groceries and eating out is, by far, the biggest area of controllable spending that I deal with in my budget each month. I have very good intentions that go very wrong when I don't plan ahead and we eat out instead of cooking and eating at home. With a small investment of time and energy, an eating plan would save us money every month. Again, this plan does not have to be complicated and rigid. It just needs to be something definite that you will stick to. Start small by deciding to eat at home 3 or 4 nights a week. Then, think of cost efficient meals for those nights. As you get used to doing that, add an extra night. As you are working on this, think of smaller food expenses that can make a difference and start cutting those out. Make your morning coffee at home 2 days a week or take your lunch to work. These daily expenses can save a big chunk of your food budget each month.
When you plan your shopping, try to make your trips more efficient. Run more errands on 1 or 2 days a week instead of running 1 or 2 errands each day. The less time you spend in places where you can spend money, the less money you will spend!
5. Limit extras and add-ons. Anything that adds any expense to a purchase price is one of the ways that money leaks out of your budget. If you are paying for a wire maintenance plan or an extended warranty or extra services for your cell phone that "only" add a couple of bucks a month to your bill, those "couple of bucks" add up in a hurry. Remember that your needs include BASIC versions of everything and stop paying for extras that you don't need.
6. Have some fun. Take advantage of spending less to do some new things. Develop a new skill; read some books (that you check out from the library); volunteer your time and skills; spend time with your family. Spending less money and paying more attention to where your money goes can be lots of fun if you employ some creativity. Make a game out of the process. Include your family in the plan and "reward" yourselves by using the money you save to go toward a fun activity for everyone!
7. Pay attention...regularly! Once is definitely not enough. If you start spending deliberately, you will have to revisit your motivation and your finances on a regular basis to make sure you are able to stay on track. Figure out a healthy balance between obsessing about every penny you spend and not knowing when, where and how any of your money is spent. Monitor all the components of your finances and make adjustments as necessary.
Just last night, my husband and I had our October Budget Meeting. On paper, everything is laid out very neatly and cleanly. Again, I have declared that THIS IS THE MONTH that what we have on paper today is what we will have in reality as we meet for our November Budget Meeting. I cannot promise that will be the case. I do promise, however, that if that is not the case, it won't be because we were not deliberately along the way!
