I recently discovered the wonders of budgeting and I must say it has been working marvelously for me. You see, I have been working for a while now and I have been hearing others talking about how budgeting their income has made things much easier for them. I have been curious to see if it can work for me too and to my great amuse it truly works.
Probably if I had started this budgeting thing a long time ago from my previous job I probably would have been a “poor millionaire” by now. Oh, did I forget to say I have had three jobs in the past and my fourth job allowed me the opportunity to indulge myself in the awesomeness of budgeting?
In today’s blog, I want to help others discover what budgeting is and how it can work great wonders for them as well. We all want to live that bougie lifestyle, taking those expensive vacation trips, wearing branded clothes, going on brunches, and living that YOLO lifestyle while staying within your budget and not running into stocks of debt. People always say money doesn’t buy you happiness, however, being broke doesn’t make you happy either, but having money in your bank account does make it a lot easier. So the big question is “How do I live a thriving lifestyle on a budget?”
I used to think luxury can only be enjoyed by millionaires and I’d just have to endure the dreadful wait, but life has thought me to create my luxury which is exactly what I’m going to be sharing with you guys. When I first started working I did what I think most first-timers (fresh out of university) do. I made a long list of all the things I longed for. My first paycheque disappeared into thin air. Today I am going to share with you a few useful tips that will have your budget effectively so that later you can enjoy ‘your’ bougie lifestyle.
First, consider why you want to budget in the first place
To know what you want from something you must first establish why you considered it in the first place. It is asking yourself the motive behind your decision. If I learned nothing in media school it is the importance of the “w’s” and the “H”: who, what, when, why, and how.
Who am I budgeting for?
What do I want from this?
When do I want the thing that I am budgeting for?
Why am I budgeting?
How much money do I expect to save from my monthly budgeting?
You should make your reason as personal as possible. This way you will be doing it because you want to and not because it is mere instruction to be followed. Personal desire equals personal success.
“Desire Drives Success”.
Second, choose your budgeting method
There are several budgeting methods out there; you just need to choose a method that works for you. At first, you might choose a method that doesn’t work, don’t give up, just choose another that can match your personal preferences. Below is a list of six budgeting methods that I guarantee can produce results for you.
- The 50/30/20 method – This method is basically where you spend 50% (food, clothing, and bills) of your income on your needs, 20% on your goals (savings towards a car or home), and 30% on you wants (transportation, and entertainment, etc.)
- The enveloping method – This is where you allocate a set amount of money to various budgeting categories and when all the money is allocated to a category that’s it for any kind of spending. This method is specifically good for persons who tend to overspend a lot using debit or credit cards.
- The zero-base method – This method is where you ensure that every dollar that you spend has a purpose. If $20 is allocated for grocery shopping, you don’t spend $21 and if $50 is for saving you don’t save $52. This method prevents you from taking monies from the grocery or saving money to facilitate another budget category.
- The continuous method – This method is generally used by businesses but it can be used for personal budgeting too. It involves preparing budgets for future periods then revising them on an ongoing basis based on how things are going in the current period.
- The 60% method – this is similar to the 50/30/20 method mentioned above. Whereas 60% of your income is used to facilitate your committed expenses (needs and wants), and the remaining 40% is divided into groups of ten and put towards your savings (retirement, long-term, short-term, and fun money).
- The reverse budgeting method – for this method you focus on achieving one money goal each month. Like paying off a credit card debt or increasing your savings portfolio by a set amount, and then, once you’ve accomplished that monthly goal, all you have to do is ensure that you break even on your monthly expenses.
Third, track your Cash
I have never really had a problem with tracking cash. My problem has always been the headache I get after going through receipts from food conglomerates, stores, and the ATM. It pains my heart when I see people crush and throw away their receipts after making a purchase. How do they track or maintain their spending habit? You can always check your online banking profile, but there are still many who make payments with cash.
Another good way to track your cash is to categorize and tally. You could do this using your mobile phone since it is always on you or get a little book that can be carried around. Make a tally of the amount of purchase you made on an item. At the end of every week, you will have an idea of what you bought too much of and what you can live without – measure your wants and your needs.
Fourthly, ditch restaurants, Starbucks, and convenience stores during work time
I recently decided to purchase myself some instant coffee and go old school with the kettle, and it has been going great. Let’s calculate. At a gas station in Jamaica, the average price for a good coffee is $180. Spending $180 five days a week for an entire month would equivalent to $3,600. At the supermarket, a bottle of coffee cost roughly $800 and a coffee creamer $500 that is roughly $1,300. This bottle of coffee would serve you for at least three months. Therefore, you will be saving $9,500, which can be allocated to another budgeting category. That is the money I will be saving from just buying coffee, so imagine the amount of money you will be saving from preparing lunch at home.
Fifthly, take advantage of food and clothes deal
Throughout the year stores have sales on special occasions such as black Fridays, end of month sales, back to school sales, and the list could go on. It is always good to take advantage of these deals. It is also important not to spend too much on these special occasions as even though you are getting items on sale you are still spending money and getting carried away could lead to spending outside your budget. Remembering even though you are spending at least $2000 less on an item you are still spending.
Finally, treat yourself to that boujie lifestyle
You’ve worked hard for every dollar that you saved, and you deserve to live the lifestyle that you believe is best for you. So after the end of your yearly budgeting and money management, you believe that you need that new car or a trip to the Bahamas then why not do both? You’ve worked hard for your boujie lifestyle.
