A Budget for Two, Please!
Can We Have It All?
Are you longing for a dream vacation? Or you wish you could afford to update your kitchen? It is a life-long dilemma: you want to experience and acquire many things but you also need to make ends meet and save for retirement. Having it all can be achieved and begins with rationing your salary to the right places. Following a budget comes natural to some, while others get the chills when they even hear about “financial planning.” Most often people make a budget but fail to follow it. Here are a few ideas to keep you on the right track:
Certain bills like rent, mortgage, car and insurance payments are the same every month. Make a list of them, total the amounts, and subtract them from your net salary. Next, deduct grocery and gas expenditures; you can get the averages of these by checking your last few monthly bank statements. The number that you arrive at after all subtractions is what you have available for discretionary spending. A portion of this money should always go to savings. The rest you can use for fun but be careful to plan a budget that you can reasonably follow.
Friends or Foes
You are finally building that vacation fund when your co-workers invite you to join them at a sporting event or show. You are afraid to say “no” because they might feel hurt or because you really do want to see the latest concert. Peer pressure is not the only cause for overspending. The American dream often means living for today and enjoying the here-and-now. It is inevitable that your spending habits will be driven by your desires, but you need to remember your long term goals. Instead of shutting down your friends completely, you can offer an alternative and less costly activity that you can all enjoy, like going to the movies or gathering at someone’s place for a drink. The money you will save by skipping the unplanned event will go towards relishing that dream destination in the near future.
Are You Spending Just to Feel Good?
Probably the biggest usurper of self-control when it comes to spending is feeling stressed out in the process of balancing work and home responsibilities. You might say to yourself “I work hard and I deserve to indulge” and you purchase that expensive fashionable item. The vicious trade-off is that you feel elated in the moment, but not when you receive your credit card bill. The same way that people get addicted to alcohol or cigarettes, they can become attracted to the high they get every time they acquire a new desired product. If you are a chronic over-spender, you need to consider that there might be some psychological causes for your behavior.
Brushing your teeth, exercising, and eating nutritious diet are all good habits. Creating a budget and spending less than you earn are the financial equivalents of these habits. Sticking to your plan on a regular basis might be challenging at times, but it will pay off in the long run.