The Taboo of a Budget
Written by Jenna Trollope
I hate the word budget, too. Nobody wants to limit their spending to live within their means.
But it’s the most important part of the equation. Saturday Night Live addressed this concept perfectly between Steve Martin and Amy Poehler in a sketch called "Don't Buy Stuff".
It only gets worse as time goes on, so it is worth setting limits for yourself that you can stick to long term. But budgeting does not have to mean giving up your favourite morning latte or skipping a drink after work with your friends. We all have our vices to keep us sane and motivated. However, you need to prioritize your spending.
Go through all of your purchases over the past few months. Whether you swear by your credit card or you operate strictly in cash, take some time to see where your money is going. Classify each transaction as either primary, secondary, or an extra and eliminate anything you do not need.
Naturally, each of us will classify our expenses differently depending on where we find value. Costs like rent, utilities, and car insurance can be considered primary expenses. They are non-negotiable and a standard amount every month. Your secondary expenses maybe your phone bill, food expenses, and internet bill. I know these are important expenses in your life, but you can control how much you spend in these areas.
For instance, you can prepare all your meals at home or frequently go to restaurants. I love eating out and I set this as a large portion of my monthly expenses, but to counter those costs I rarely go shopping. This allows me to tailor my budget to my lifestyle and make sure I am still enjoying the little things that bring me joy while regulating my cash flow. You can research various internet and phone providers to see if you are getting the best deal and sometimes you will find a bundle for your insurance or service providers. Remember, you can usually negotiate a better deal with companies to keep your business.
Finally, you have your extra expenses and these can be literally whatever you want, but this is where you set firm boundaries. For any Parks and Rec fans, think of this as your TREAT-YOURSELF-TUESDAY costs. A fantastic example of this is a subscription service such as Ipsy. I have one friend who adores it since she loves makeup and would spend more money testing the products herself, so for her, it’s worth the monthly fee. However, my current roommate doesn’t wear makeup and she never uses the products. For her, the subscription is not worth it and this is an easy expense for her to eliminate from her monthly spending.
Take your time and be realistic! You should not live off ramen noodles and stay home all the time, but realize you can’t consistently spend more money than you make. Like everything else in life, you need to find a balance that works for you. Best of luck and we would love to hear tips that work for you to limit your spending!
Making more money will not solve your problems if cash flow management is your problem.