For those of you who know me well, you know that every Tuesday fortnight is budget night. I’ve been budgeting my money since I turned 25 and I love budgeting. It is one of the most empowering habits I have and it is a skill that serves me well as a small business owner.
I haven’t always been a successful budgeter and even now, I still go over budget once in a while (I do have a safety net though – but I don’t like to use it often.) Usually, I spend 80% of my pay packet on living expenses with the other 20% going straight into savings – Mostly, I am successful and don’t spend the money I have earmarked as savings. This month I’ve decided to challenge myself even more and only spend 50% of my usual pay packet. I’m actually quite nervous about this, but I’m excited because I think there will be lots to learn.
That being said years of budgeting have taught me many valuable lessons that I think will help me out in this challenge.
Lesson 1: Know my day to day living expenses
Budgeting became a lot easier after I learned to log and track my expenses. I use the app “TrackMYSpend” which is an app developed by the Australian Government – so it’s a little buggy – but I love it. It allows me to see where I spend my money the most.
This simple task is a lot harder to complete than you think, not because you need to remember to “write down” what you spend – you can fix that by keeping receipts on everything you spend and logging it later – but because of the emotions that come with keeping track of your money. It was hard at first because I couldn’t help but judge myself as I put what I’ve spent into the app – especially when I ended up going over budget, which was often.
That being said, even though this is a hard thing to do there are so many benefits – but that’s a blog for another day
Lesson 2: Make sure I don’t feel deprived.
Usually, the word “budget” is associated with self deprivation. For me, budgeting means making better choices about how and where I spend my money.
For my challenge to be successful; I know I can’t cut out some of the things I love doing and having – like having a meal out with friends. I have to make sure that I account for social occasions too such as birthdays. This is where Lesson 1 comes in handy. Knowing how and why I spend my money means that I can identify areas in my spending that can be cut. This means becoming more creative with how I spend my money. Here are some of my bigger categories of expenses that I’ve noticed over the last few pay cycles ands some of my ideas to reduce my spending:
- Gym/fitness – I’ve recently finished a 3 month run of TiffXO – I really like this program and I think it’s a nice one to stick to if it suits your lifestyle. The program costs approx $39 a month – which isn’t much but I also pay for a fitness passport and studio sessions at a local pilates place (which I’ve paid for in bulk because it’s cheaper). I’ve downloaded some TiffXO work-outs and recipes for my budget challenge.
- Beauty and Cosmetics – Instead of spending my money on someone giving me a manicure or a massage – which admittedly I don’t do a lot but I know if I’m on a tight budget that I’m gonna want – I’m gonna start fishing out some of those bath products that I haven’t used and schedule in some me time.
- Drinks – Gosh, I could spend $60 a fortnight on drinks. Chai Lattes and Kombucha have been my recent weakness. For Chai Latte’s I’m thinking I might get a box of special blend chai from T2 to keep at the office. The Kombucha – I know I like for two reasons the first is it’s probiotic features (which I’m going to replace with a daily apple cider vinegar tonic each morning – as I have a crap load of ACV at home) and the second is it’s fizzy sensation – which I will replace with mint and soda water.
- Bought Lunches – This is a huge expense for me – which can be managed by doing more meal prep; I’m also going to try and challenge myself to work with what I have in the pantry and fridge to help reduce the grocery bill – I’ve also decided that I will only eat out if I have someone with me. Recently, I’ve increasingly begun to eat out alone which has blown my budget more than I’d like to admit.
- Books, Music and Movies – This year I’m participating in the Popsugar Reading Challenge. In August I’ve decided to not buy books and to focus my attention on the books I already own but haven’t read. I’ve also registered for a free trial with “kindle unlimited” so I have some other choices, also I have a library card.
Lesson 3: Set a Time Limit
I think mentally this helps when looking to complete any kind of budget challenge. I’d love it if I could always save 50% of my pay packet every month but I know that’s not going to work out in the long run. That being said, a lot of the good habits I have now developed came because I set myself small financial challenges. My financial goals have changed their focus from “saving $X” to learning to develop better habits with money.
So there you have it, my plan of attack for my August Budget Challenge!
Wish Me Luck!