Do you feel you need to pull in the belt on your budget this year?
Here are seven steps to ensure budgeting is about expanding your options, not restricting them.
List Your Luxuries
Write down everything that is important to your lifestyle, suggests Simone Milasas, Founder of Creator of Joy Of Business.
“Do you love wine? Then jot down whether it’s a clean skin, a $30 drop or a french bottle. What do you want the luxury in your life to look like? Once you have your luxuries – not necessities – on paper, you can then itemise how often you can indulge in them,” she says.
“You may find that French champagne and caviar is possible once a year, or once every two months. You may surprise yourself by avoiding ‘excluding’ these things from your life, but rather, including them every so often instead.”
Face Your Financial Reality
Simone also suggests revolutionising your financial reality by knowing exactly what it costs to live your – not someone else’s – life.
“Write down every single expense you have. Be brutally honest, don’t hide anything,” Simone recommends. The big costs – like car maintenance, school fees, gym memberships etc, need to be broken down to monthly outgoings and divided by 12 (or whatever payments they are made in, whether that is weekly, monthly or fortnightly etc.) to ensure there are no surprises during any month of the year.
“When you get the total, ask [your employer] for that amount of money and more,” she suggests. “The first time I did this exercise I was in shock, but I chose to go for it anyway. What was the worst thing that could happen? In months, I was on track to earning that amount of money and more! This doesn’t make logical sense, but every time I do this exercise my money flows change.”
Share Your Financial Goals
If you are married or have a partner, approach all of your financial realities and goals together. “What’s your rent reality? What’s your shared mortgage reality? Your shared utilities? Your shared interests – including movies, restaurants etc?” Simone urges you to ask. “Look at these realistically together so that there is no area for confusion or a break down in communication about your priorities so that you both retain your personal goals without losing the shared ones.”
For more tips to ensure that budgeting isn’t boring go here for more of Simone Milasas tips on Lifestyle You for you to have financial awareness and have the joy of living!