- Are you living by paycheck-to-paycheck?
- Are you struggling to meet your budgeting goals?
- Do you want to get into investing but you’re strapped for cash?
Then you’ve come to the right place!
In this article, I’ll go over the main budgeting setbacks and teach you how to deal with them.
If you’re trying to get your life in order, becoming financially independent should be your top priority. Because, let’s face it – no matter how driven and motivated you are, you’ll have a really hard time getting anywhere if you can’t get some cash together. And before you start making excuses about your boss or your salary, let me tell you something else – how much money you’ve got depends entirely on you!
But that’s easy for me to say, right? After all, I’ve already got my businesses, I’ve got my investments, I’ve got my properties, yadda-yadda.
However, I’ve got a little secret that I’d like to share with the class – I wasn’t born wealthy. Actually, it was quite the opposite. As most of my frequent readers already know, I was born in your run-of-the-mill Eastern European village, and I grew up in a rather spartan environment. It wasn’t until I came to London, some 20 years ago, that I started looking into businesses. Getting to where I am today took me over twenty years of hard work. I had to learn everything about leadership, management, businesses and investing all on my own. But I didn’t give up. I kept trying until I succeeded. And, if a village girl without any prior knowledge can do it, then so can you!
Yes, you there, sitting in your comfy chair, staring at the screen of your fancy digital device. You can most certainly do it. I believe in you!
Hello everyone, and welcome back to my success series. I’m Antoaneta – a London-based business leader, passionate about investment, finance, minimalism and eco-friendliness. In today’s post, I’ll be sharing my Top Ten Personal Finance Management Tricks that will improve your quality of life and help you succeed. We’ll talk about:
- Emergency Funds
- How to Use Your Budget
- Small Expenses Add up
- Deal with Debt
- Cancel Some Subscriptions
- Apps and Tools
- Never Stop Learning
Let’s get started, shall we?
Knowing how to budget your money and actually doing it are two very different things. And, even though most people know that they should be budgeting and they know how to budget, they just never get around to it.
Some people avoid budgeting because they don’t like thinking about parting with their money. Others just dislike working with numbers. But even if budgeting isn’t your idea of a good time, you should still do it! Here’s an easy way to make a quick monthly budget.
Grab a notebook and divide the page into two parts. On one side, you write down the money that will be coming into your accounts, and on the other – your expenses. In the spending section, you’ll want to include:
- Food and necessities
- Bills and living costs
- Insurances and debts
- Travelling and transportation
- Savings and emergency funds
- Leisure funds – trips, restaurants, movie tickets and so on
Now, comes the hard part – balancing. The sum on the left side of your page should be higher than the total amount on the right side. If your expenses are higher or equal to your income, well, it’s time to make some changes.
Once you finally figure it all out, don’t just stick the notebook in some drawer and forget about it. Your budget is a vital tool that you should consult with frequently. What do I mean by that? Well, once we get to tip Number Five, you’ll see for yourself!
Set your financial goals and stick to them
When most people take a look at their monthly budget for the first time, they realise that they simply can’t sustain their current way of living and save up properly at the same time. If this happens to be the case for you, don’t worry – it’s perfectly normal, and I’ll teach you how to deal with it.
Just don’t go and do what everyone else does and reallocate the money from “savings and investments” to monthly leisure! The truth is that … you simply shouldn’t be spending as much money on non-essential things. Yes, I know that it sounds harsh, but if you really think about it, you’ll realise that I’m right.
If you want to get anywhere in life, you can’t afford to live day-to-day. Having fun “now” is great and important and all, but it’s your future that actually matters, and it’s the future that you should be focusing on. Besides, if you have children, or ever plan on having them, it’s not even about you – it’s about their future as well!
Here’s a very simple (and practical) way to look at it:
If you’ve spent a big portion of your life in a financially difficult situation, would you really want your kids to go through the same thing? Of course, going from nothing to a billionaire isn’t a task that most of us can achieve, but that shouldn’t stop you from trying to secure a better future for those who come after you!
Establish an emergency fund
No matter how well you plan things out, eventually something unexpected will happen. If you are unprepared, an emergency situation might push your budget over the tipping point and send you into the red zone. The best way to mitigate that is by setting aside a bit of money for an emergency fund every month. The next time your car randomly breaks down or you need money to replace something at home, you’ll be able to handle it, without hurting your budget.
Saving and setting funds aside is a very important step, but it’s only the beginning. You don’t want your resources to just sit there – you want them to grow. Preferably, with little-to-no input on your part. The best way to do that is by learning how to invest and getting your money to work for you. As a matter of fact, I’d go as far as stating that investing is one of the all-important keys to achieving true financial independence.
And if you’re new to investing don’t worry – I’ve got plenty of articles on my website that can help you get started. As always, links can be found in the resource section down below.
Use your budget to make financially-sound decisions
Whenever you decide that you need to buy something big – a new car, some fancy piece of furniture or a couple of brand-new electronic devices, you should consult with your budget.
Income doesn’t equal disposable income. Just because you got paid yesterday doesn’t mean that you should go and immediately spend your money.
Instead, check with your budget and see if you’ve got enough money for the purchase after accounting for everything else that you should be doing for the given month. And yes, that includes savings and investments.
If your new shiny toy doesn’t fit in the budget, then it’s best to wait. After all, you can always get it a couple of months down the road. And the best way to go about it is to simply add a new category into your budget, like “new car fund”. Keep adding a bit of money into it every month, and you’ll be able to make the purchase in no time.
Don’t forget the small expenses
Small expenses really do add up. Going out with your colleagues after work, grabbing a pint in the pub with your buddies on the weekends, and even your daily Starbucks all need to be considered in your budget. They might seem small and insignificant, but, over time, they can easily creep up on you.
Eliminate your debt
Debts are, well … bad. There’s no other way to look at it. If you’re currently in debt, the best thing that you can do for yourself is to work on getting rid of it. Of course, this is usually easier said than done, but if you put your mind to it, you can generally deal with most debts rather quickly. Here’s how I’d do it:
- Avoid taking on any new debts – yes, I know this might sound obvious, but you’d be surprised by just how many people fall into this trap.
- Schedule your payments and keep a close eye on them – this will ensure that you don’t delay or miss any dates.
- Allocate a significant portion of your money to paying off your debt – yes, I know it sucks. Still, if sacrificing your leisure budget can help you eliminate your debt even a month sooner, then it’s absolutely worth it.
Limit your “subscription” spending
If you ever took an interest in modern business models, you’ve most certainly noticed that a ton of companies use either subscriptions or micro-transactions to make their money. That’s because most people have an easier time justifying smaller consistent payments than big, one-off type of deals. As a matter of fact, on average, people are going to spend a lot more money on these types of systems.
If you’re trying to limit your spending, that’s one of the first places you should check.
Don’t be afraid to get some help with your budgeting
The digital world is filled with tools and apps that can help you stay on top of your budgeting game, track your spending, find the best deals for your items, and even to keep a close eye on your habits. We already carry our “smart” devices wherever we go, so we might as well get some real use out of them, don’t you think?
Never stop learning
My last, and probably most important tip is that you should never stop trying to improve. After all, the best way to learn more about something is by practicing it. So don’t worry if your budget isn’t perfect from the get-go. You’ll get better at it as time goes by. As long as you set realistic goals for yourself and you keep trying, you’re guaranteed to get the hang of it. Remember – twenty years ago, I knew absolutely nothing about business and investments. If I can do it, then so can you!
And would you look at that – we’ve run out of time for today. I hope that you found this post useful and I wish you luck in your budget planning. You can also check out my previous blogs such as “How To Have A Positive Mindset About Finances“.
In closing, I’d just like to remind you that this post, along with any other information you’ll find on my website, is based upon my personal experience and research. I am not your financial advisor, nor your life coach. As always, I’d highly advise you to do your own research, and consult with a certified professional before committing to any serious changes.
But what about you? Do you have any experience with budgeting? Do you manage to meet your goals every month? What are you trying to improve right now? Please leave your thoughts, ideas and experience in the comments section below – I always love hearing from you!
Thank you all for reading, and until next time:
Recommended for further reading:
- The 7 Habits of Highly Effective People – Stephen R. Covey
- 24 Assets – Daniel Priestley
- The 7 Habits of Highly Effective People
- Rich Dad Poor Dad – Robert Kiyosaki
- Mindset – Updated Edition: Changing The Way You think To Fulfil Your Potential
If you are looking to open an investment account, follow these links below:
- Passive income
- Silver & Gold coins
- Interactive Brokers
(‘68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)
Thank you for the great tips. Having an emergency fund is crucial!