Managing Money on a tight budget
During my time at Xplosiv Enterprises I have researched thoroughly some mindsets about the home finances. We used a wide variety of people who budget for the home and found that the most common problem was not a lack of money but a misunderstanding on how to appropriate the finances.
The typical symptom of this kind of problem is for the person in question to spend more than what they earn. I would say that out of the people we interviewed and talked to about the home finances, this was a clear concern to me. Most people simply don’t think it’s necessary to live within their means. I am not talking about the poor who are living to their means as much as they can I am talking about Mr. average who earns a good living and spends what little extra they get on silly things.
Why is it that when we get more money we spend more … do we realize the paralyzing situation that we are putting ourselves in by doing this? If you continue along the road of spending more than you earn the problem you have is not a financial… it’s psychological. If you think you earn more than you do, then you are deceiving yourself … even if you earned double you would still spend it. So how can we curb this ‘adjusting up’ mentality?
Keep a strict budget. I know you have heard this before. The problem isn’t the budget it’s in enforcing the budget. For example, say you are a party animal and want to spend a fortune on beer. What would you have to sacrifice to make it happen? Perhaps you are given to bursts of obscene shopping then if there was no way for you to pay cash what would you use? What element of your budget would have to shift? Think about it. If we were in the feudal system and you had a wad of goats to trade … you would. But if you didn’t then whatever you wanted would require goats that you didn’t have therefore you would go about acquiring more goats, right? Yes. Why would you spend money that’s needed in other areas on beer? It’s because in your mind you think this is a good idea. You need to change your mind on this matter before the repo-man takes all that you own my friend!
So when you are thinking of managing money better and what that ‘little extra’ will go to – then use some kind of positive reinforcement technique. If you want to drink heaps of beer instead of making a car payment carry the finance company’s card around in your wallet. What shoes instead of saving that little extra. Dream up a goal … say taking a holiday or hiring a boat. Now get a picture of that dream and put that in your wallet. If you spend that money tear up the picture and then replace it. Soon you will see your folly. Feel like spending that money still, then CUT UP your credit card now and learn to live without like they did in the feudal days.
In closing I would like to offer you one piece of advice. What you do today is not an isolated event. It’s part of a broader string of events that make up all of your life. You can make one mistake and spend years paying for it. Believe me I know. Remember nobody knows you like you do so find a way to stick to your budget and do it. You will thank yourself for it later.