Even though it may seem to be a skill that should come naturally, being on top of money is not easy.
There is a lot involved when it comes to managing a budget, spending within your means, and saving.
While I am far from an expert in these matters, my husband and I have managed to support a family on a low income while avoiding debt and being able to enjoy some ‘luxuries’.
Designate a week everyday to deal with bills and invoices
The time and place don’t matter as long as you’re consistent each week, the key is creating a habit. Try to not skip any bills, unless they are high and you are waiting for money to come in (in which case, you should deal with deal as soon as you have the amount needed). If you have direct debits set up, use the time to check the money that will be taken from your account in the coming week to avoid surprises.
Stop paying for things you don’t use
Subscriptions are a fantastic way to save money, but only if you use them! If you have subscriptions that you’re not using, cancel them now or downgrade them to what you do need.
Keep track of where you money is going
Not just bills, but everything you spend money on: to-go coffee, snacks, impulse buys… everything! You will probably be surprised by the results. You can track this on paper or digitally. If your bank offers online banking, check to see if there is a service like this available. You may be able to go back and see your spending from previous months. If you have a bullet journal or planner, you could add an ‘expenses’ tracker there.
Wait before buying
We all usually shop around for large purchases, but don’t think twice about cheaper things. This is painfully obvious when you go to a discount store, where people pile up purchases because they are cheap, only to realise they over-spent when they have to pay. Before grabbing something, stop and think if you do actually need it.
Start saving automatically
Most current bank accounts come with a saving accounts attached to them that people don’t use. You can set up automatic payments into this saving account and start saving money slowly. If you don’t have a savings account, creating one is usually a very easy thing to do. I created mine in less than 5 minutes online for free. If you can, choose a savings account that will pay interest.
Keep an emergency fund
This is part of starting to save money slowly. Life throws random surprises at us all the time, make sure you have a cushion to see you through them. You may be financially secure at the moment, but you never know what the future holds. Ideally you will have an emergency fund that can see you through at least 3 months of frugal living. And remember, this is not a holiday fund or a fun fund, it’s for emergencies only.
Learn about finances
There are loads of books, websites, and videos that teach about personal finances. Take the time to educate yourself, it’s worth it. Just be careful to follow people from your country (as legalities will be different depending where in the world you are) and avoid becoming a hardcore fan of any ‘finance gurus’.
Depending where you live, you may want to start saving money towards your retirement
Some countries have fantastic pension systems, while others barely support their older residents. Regardless of your country’s circumstances, it’s always a good idea to save money to make sure you can still enjoy your later years and not be forced to live on the bread line.
Declutter and sell
Decluttering will work wonders for your mental health, and if the quality of the items is good you can give them a second life by selling them. Donating might sound like a great option, except that many donated items end up in landfill. If you donate, try to do it directly to the person who will benefit from it (local Facebook groups are great for this) or local charities that will appreciate your donation. The money you get from selling your items can go into your emergency fund.
Make a budget and stick to it (within reason)
The first step to create a budget is to know where your money is going, so track your expenses for a while if you haven’t done that yet. Once you know that, see where you can make cuts and where you need to spend money. That will be the starting point of your budget. However, you should remember that a budget is a living document. As your life circumstances change, your budget should be modified.
Do a no-spend challenge
These are, of course, challenging. But they are also very informative. By forcing yourself to not spend any money for a certain amount of time, you will be able to realise what you really need and what you are spending money on with no reason. Just make sure you don’t take it to the extreme, buy food, pay bills, and ensure your safety is well taken cake of.
Look into generating a second source of income
I am not talking about turning your hobbies into a business, I am very much against hustle culture. That said, a lot of people have skills they developed during their free or work time that they are not putting to use and that could potentially generate income. I will use myself as an example. I am very good at paying attention to details, so for a while I worked as a mystery shopper in supermarkets and cafes. It didn’t take any more time that it already took me to go get groceries or relax at a cafe with a friend, and it gave me enough to pay for almost 2 weeks of food for the family (plus often getting freebies). Another thing I started doing as a side job was social media management while I was commuting to work. Instead of using that time to play a game or listen to music, I would work. Eventually, I was so successful that it became my main job. Right now my second source of income is my Red Bubble store.
Don’t be afraid to downgrade
Do you really need all the features on the things you buy. It might be nice to get the latest phone, but if you’re only going to use it to text people and watch videos, then you don’t need anything too fancy. Don’t fall into the trap of brand status either. Lesser known brands can be just as good (or better) than big-name ones.
But with common sense. Money is a tool and it’s there to be used, not accumulated. If you have money, use it. But spend it on those things that are really important and will improve your life (and your family’s).