Most of us feel like this cat when we’re talking about our personal finances, but I read in an eBook recently that you are supposed to do your least favorite item on your to do list first, so I’m starting the week off with Money Management. Nobody wants to think about, nobody wants to talk about, but we all have to live it. So let’s make it as painless as possible!
Here are some simple tips for managing with ease:
1. Compare your fixed costs and your overall spending with your monthly income. (Mint is a great tool for this.)
2. Figure out what can be cut down in your cost column. (Too much restaurant time, too much shopping, I don’t really need cable, etc.)
3. Determine how much of your income you would like to save each month. (20% is a good place to start)
4. Set budgets for food, going out, entertainment, shopping and household items. (more on this later in the week)
5. After a few months, see how things are working and determine whether you need to spend more or less on a certain category.
6. IMPORTANT: Don’t punish yourself, if you overspend one month, its ok, just get back on the wagon.
7. ALSO IMPORTANT: Reward yourself. If you’ve met a financial goal, treat yourself to a little something you’ve been wanting. After all, we are all human. (Also try purging with a payoff)
This is your money map; it’s totally up to you on what roads you want to take. Personally, I’m not huge into gourmet food or trying the best restaurants, so I knew that my budget could be smaller in that area. You may love that, so your budget trims will be in a different area. I love watching basketball, so I choose to spend more money on cable so I can see all the games.
Also, make sure you’re not depriving yourself of the things you love, that can make this process pretty miserable. I look at it as making those favorite things that much more awesome. For example, I love the mocha latte at a certain coffee shop in my area, but after subbing soy milk, that bad boy is $6. So, I let myself have one twice a month, and honestly, it makes the drink taste that much better.
What is your budget problem area? And what area is super easy for you?