For some of us, how much we earn in a month is basically the only amount we can work with. Thus, some of us struggle to make ends meet given this budget, and to live with the limited resources we have.
Many folks also understand that if we spend too much, we’ll definitely decimate the budget and end up in debt. However, understanding versus actually doing and practicing are two very different things. Most of us are too easily seduced by ads that come our way, and some of us can’t resist buying small items that, at first glance, may not seem to hurt our bottom line. However, if you’re someone who can’t resist purchasing stuff or can’t stop drowning yourself in comfort food, then you might find that over time, your budget will be withdrawn.
Thus, we all have to get one thing straight:
If you are someone who needs a budget and you end up not respecting it, you could risk going broke.
A lot of people erroneously believe that it’s only the big-ticket items that kill the budget. However, truth points this way: small things also have quite the propensity to kill a budget.
Its killer sting lies in the deception that when something is cheap, it deludes us into buying stuff that we may not need. However, reality shows us that 50 $0.50 doughnuts or lattes in a month add up to $25. Yeah, it’s “just” $25. However, in four months’ time, that monthly $25 expense adds up to $100. That’s already half the cost of a 16GB iPhone. That’s already more than what you need to start an online business. That’s 1/10th of what you need to get started on your $1,000 emergency fund, according to Dave Ramsey’s Baby Steps system.
“But I don’t eat 50 doughnuts a month!” Oh yeah? Well, maybe your family does. Counting everyone in the family, you might find 50 doughnuts consumed over 30 days translates to around 1.667 doughnuts or around a doughnut and a half. Upping those numbers just slightly or including a latte into the picture will actually cost you some dollars more. It can be pretty easy to add to your expenses and break that food and shopping budget without meaning to.
So how do you deal with this stealthy overspending? How about starting a lifestyle of being disciplined — a lifestyle of “respecting” your budget?
Here are some tips we can offer you:
1. Write down everything you need. Does it fit your earnings? If it doesn’t, you may have to make do without a couple of things.
2. Give yourself a daily allowance. Make sure that it has room for a few affordable pleasures, like an occasional bar of chocolate. If you find that you’ve spent your daily allowance, don’t get anything else. If you really want that bar of chocolate, then spend a little less for your lunch.
3. Be as strict as you can be with this rule: If you didn’t write it down, you can’t buy it. Unless you get serious about respecting your budget, it won’t work. Really.
4. As we mentioned in #2, substitution works. If you need to succumb to a few guilty pleasures here and there, like that bar of chocolate, or yes, those $0.50 doughnuts, then choose lunch that costs a few dollars less than what you usually spend. If you want to get something that isn’t in your budget, like a new gadget that you’ve always wanted, then sacrifice a little. Choosing to skip the theater (which is expensive anyway) in favor of watching DVDs can help you set aside the funds you need for the new electronic gadget you’ve got your eye on. Eventually, you’ll be able to pick up that iPad!
See how substitution, a little restraint, and patience can get you a long way?
Best of all, as you work on changing your spending patterns and cutting out the tiny things that could make a huge dent on your budget, you’ll find that you’ll have a lot more extra over time. You should then pass those savings over into a high yield savings account and let your money work harder for you.