Over the next couple of months, we’re going to focus on figuring out how to have more money to party, travel and shop whenever you like!
Ok…realistically, it may be less than you would like, and sometimes may be nothing at all but I hope I at least got your attention.
The real point of Practical Money Management Tips is to help you figure out what simple things you can do to help you better enjoy your life and not worry about money no matter how much (or little) you make.
The experts are always telling people to budget, save, diversify, maximise, and a lot of other financially-type’ terms. However, because most people usually make emotional spending decisions, until you understand how & why you spend, you’ll never be able to manage your money.
I, for example, LOVE dining out whether it’s by myself or with friends, that’s my thing’. I used to lie to myself about why I dined out all the time, but the truth is I dine out because I hate going home to an empty house. But I realised, when I dined out, I enjoyed myself, met new people (primarily bartenders & hostesses) but enjoyed myself a lot more than when I went immediately home after work.
Understanding this about myself allowed me to allocate a realistic amount to my budget for Dining Out. The compromise (yes, compromise we’re not wealthy or we wouldn’t be having this conversation) to that is that I had to also assess the things that didn’t matter as much to me (eg., makeup, clothes, jewelry), and make a decision on how much less I would spend on these items in order to truly enjoy the thing that matters to me.
Making this realisation also helped me to realise that I can enjoy my money in a way that really matters to me versus creating a budget based on what an expert’ says I should spend my money on. [I can guarantee no experts would agree with my budget for Dining Out – trust me on this one, I’ve checked].
But the most important thing is that I’m happy & enjoying myself when I dine out because I’ve budgeted for it. I don’t feel guilty when I spend it & I’m not secretly worrying that I’m not going to be able to pay other bills.
Until you know why you spend the way you do, you’ll never be able to create a realistic budget for yourself. So, let’s take the first step…
Over the next month, try to write down:
1) What you purchased [Yes, everything. Things like snacks, utilities, the Sunday paper]
2) How you paid for it [Options: Cash, Credit, Debit]
3) Why you purchased that item [Yes, each item. Newspaper: I like doing the crossword puzzle & telling people about it so they’ll think I’m smart]
You can keep this in a spreadsheet, notebook, word document or on the back of a gum wrapper whatever works best for you just make sure you do it!
This info is going to be the foundation for everything we’re going to work on in the next few weeks. I promise you that at the end, you’re going to be much more knowledgeable about money management (or at least Excel).