Imagine being so controlled with your spending that you actually only spend the money you allow yourself to. The discipline is astounding, but alas some have more self-control than others. It seems that since the introduction of online banking, money has become invisible. You see it on a screen, but hardly ever physically hold it. Money is now a debit card, which can be dangerous for you and your strict budget. Having an account balance in surplus of your budget is always a fine sight, but what happens when you go over your budget? We are under the impression that a few dollars here and there over is not a problem, but it easily stacks up. Keep yourself in check by creating a strict cash budget, so you aren’t tempted by the easy-peasy tap ‘n’ go of Paywave.
First you need to layout your expenses and divvy it up to ensure you end up with some savings as well. Once you decide on a budget, you withdraw your allotted money for groceries, transport, eating out, entertainment, insurance, rent etc. and divide into envelopes. This way you physically see how much money you are spending and are more conscious of your purchases as you see the $50 notes turn into $20s. It is a little rare to see someone pay in cash nowadays and can be dangerous, but that is why you only take the required envelopes when heading out. By paying in cash you’ll also avoid bank fees from too many transactions – it’s truly the little wins in life.
What about a surplus?
Now that you’ve bought your groceries for the fortnight and have $60 left, what are you going to do with it? You could always pop it into another envelope for a treat, or cut down your budget for the following week, but there is another way! When you receive change, don’t go ahead and spend it willy nilly, but rather put it aside into a jar for savings. It could be for a trip, increase car loan repayments, or even saving for a house deposit on the side. Physically seeing the money will make you more determined with your savings and also get you excited about how you are going to spend it!
Take a stab at zero-base budgeting while you’re at it! It’s pretty similar to envelope budgeting where you only spend your allotted funds. It’s also pretty simple to stick to it if you create a spreadsheet of your expenses. You can also track your spending on the abundance of budgeting apps available for your phones these days. Try Mvelopes, Mint Budgeting, or PocketGuard Budget. You can see what you are spending then and there, as well as cut costs with coupons offered online. Just make sure you are only spending what you need and popping the rest into a savings account – you don’t want to be caught without an emergency fund like a deer in headlights.
Pinterest is a marvellous thing. It’s full of budgeting ideas, but also ways to make saving fun! You can decorate your envelopes, delegate money to personal jars, and even write positive notes to give yourself that push to save on days you feel like giving it all in and taking off on a shopping spree. It’s not hard or expensive either. Get out your kid’s pencil cases and you’ve basically got a brand-new craft station to start fresh. You can also hit up the discount craft stores for some jars and decorations or take a peak in Kmart for some inspiration (just make sure you don’t bring a full one of your envelopes along with you, because that won’t end well).
So head out to the Post Office and withdraw your money from the bank to start your new, super-simple budgeting system! Download some apps like You Need A Budget and Goodbudget on the way home and in no time you’ll have enough stashed away for all the extra fun things you want to do like take off overseas or upgrade from your old car!
Now you have your budget in order, ready to apply for a vehicle loan?
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