PERSONAL BUDGETING PERSONAL
THE HOME YOU'VE GOT > WAYS
Let's not make this too hard... I know you can find books and articles on how to set up a personal financial budget for yourself. And I know that sticking to a budget can be as hard as sticking to a diet... unless you're really going to envision a better outcome - a better way of life that will support your real desires to be change, to experience life differently.
Here, I'm going to concentrate on some personal budgeting basics - ideas you can put to use right away in your thought processes.
First, no matter what sort of budget you wish to set up for yourself, a detailed chart on paper or simply rules-to-live-by in your head, you need some help prioritizing the many types of expenditures that come into play. So let's look at a simple system of categories - kind of like numbering things from 1 to 4 in importance... but this way you don't have to remember which number means what:
- Real needs (like rent, insurance, food - if you're already frugal)
- Needs but might be adjusted (like lower rent, lower insurance rates, less specialty food/eating out, etc.)
- Major wants (that which will contribute greatly to your happiness, fulfillment, joy)
- Fluff (this is stuff you can do without - sure you can!)
When you go to analyze the many things you do spend money on, it might be just as easy to type up the list right into a 4-column chart (in a word processing program or a spreadsheet) headed by these categories - and then move the items into different categories as you adjust your thinking.
Or, you can assign numbers to the categories and annotate a written-out list of your expenditures.
Or have some fun with it: put the category columns onto a poster, write each expenditure on a sticky note, and stick them into the column (so they're easy to move around).
Or just imprint the categories on your brain and bring them to mind whenever you come to question an expenditure (and make a habit of questioning them). Whatever you like best!
...As long as you're actually thinking about what you do, you'll be steering yourself into personal budgeting, even without charting everything you get and do.
Now, there are two other focus points I'd like to offer up:
- Paying yourself first
- Saving for the future
I know, they sound like the same thing, don't they? - and a lot of money mavens consider them so. But to me, there are two different, and perhaps equally important (that's for you to decide), things here:
- Paying yourself first, socking away something for what you greatly desire - a dream vacation, training for a new profession, the ability to pursue a hobby, a lifelong goal, etc. If you don't save for you, you're likely to fritter away your financial capacity for making important things possible - or steal from the needful to make them happen (like binge eating while on a too-strict diet) and get yourself into financial trouble. (Of course, you can pay into such an account with financial windfalls, too.)
- Saving for the future, for what you need - retirement savings, yes, but also setting aside enough money monthly to take care of those "surprise" annual or semi-annual expenses such as insurance premiums and tax payments. Get this money out of sight and out of mind (i.e., in order to get a realistic view of your discretionary income), or you'll be tempted to spend what you're going to need later.
However, in either case, your action amounts to the same thing. That is, you would need to suck money off the top of your income to go into these "holding tanks".
If your discretionary capacity is extremely limited, your payments into the "pay yourself first" account will be accordingly miniscule. But establishing the habit of paying yourself is good for your soul!
Bet the fluff can just go. (See Divestment
money-sinks for some help.)
Perhaps reading the page on Seeing
your true needs would help you to grasp the difference between needs and wants... and the importance of true desires in our lives.
Does it seem like all this would take up too much of your time? Remember that it's an investment, in the establishment of new habits and in a better life. As Janet Luhrs (of www.SimpleLiving.com) says, "If you just shut off your TV even one night a week, you'll have plenty of time to manage your money!"
Another consideration I'll add as an umbrella idea to the discussion of hows is this: Staying home rather than going out (staying home more often, combining errands, developing home-based hobbies and/or businesses, maybe even getting friendlier with your neighbors) can save you a whole lot of money over the course of a year.
It's all up to you, of course... but you can find ways to save - and still enjoy life.