Everybody budgets, but only a few do it and succeed. Sometimes you wonder how you manage to survive, considering how far you veer from your budget each month.
The problem with many people’s approach to budgeting is expectations. They’re set at unrealistic standards that do not meet real-life needs. If you do an analysis of your expenses for the past three months and compare it to your budget, you’ll notice a pattern. You probably spend money on things you don’t plan for and end up compromising. It’s either that or you do not allot enough for these expenses. Consider following these tips to start handling your finances better.
Delay and Save Up
There are expenses down the road you can anticipate. For parents, it’s a child’s vaccination, and for young professionals, it can be wisdom tooth removal. But wherever you live, be it in Singapore or London, keep in mind that not all medical bills are emergencies. Unless your wisdom tooth affects daily activities, you can decide to have the procedure months into the future to save up for it.
Often, it’s decisions on medical needs such as tooth extractions that catch your budget by surprise.
If there’s nothing on the horizon that concerns you yet, it’s a good time to set aside money for emergencies. This is so you can deal with more urgent health matters without worrying about rent and bills.
It’s also worth making your inventory of health facilities in your area. Knowing the services they provide and the policies they practice give you a wide variety of options that can temper your spending.
Acknowledge Social Activities
Cutting back on socialising may be a better idea than resisting it altogether. Regular interactions with people you love and admire can boost your physical and mental health. It’s also a good way to prevent depression, especially if you have a demanding job description.
Feelings of anxiety and isolation can tempt you to splurge on food and material things you don’t need. The guilt that comes after compromising your budget only worsens it.
Schedule your social activities in advance if possible and choose places that give you the option to spend less. Being transparent with your friends about your budget can also reduce the stress of socialising.
Recognise the Miscellaneous
Different things can fall into this category for different people. To identify what miscellaneous spending is for you, keep a diary for a month. Organise your expenditures into different groups like food, housing, clothing, entertainment and other essentials. Whatever else is left that doesn’t fit into any of them is considered miscellaneous.
This can range from registration fees to a new wallet. They’re not things you spend on monthly, and the need for them arises in unexpected moments. Allocating a budget for this, no matter the amount, helps you stay in line with the rest of your projected expenses.
It also raises the question of whether you need to spend on it. A new wallet may not be a necessity if you have an old one lying around the house.
Reflecting on these impulses and responding with self-control develops discipline. No matter how well you plan your budget, any impulsive buying can ruin it in a moment’s notice.
Self-control doesn’t happen overnight. Give yourself enough time to adjust to your new budgeting scheme and forgive yourself for the occasional mistakes. With consistency and perseverance, you’ll see a difference in your finances soon enough.