The longest journey starts with a single step. Rivers consist of drops of water. Grains of sand becomes a beach. In the same way, what you do with your money every day, adds up to your money situation at the end of the month or the year or the decade. Getting out of debt is less about earning a bigger salary and more about bringing your day-to-day spending under control.
It is easy to underestimate the impact of a few rand spent here and another few spent there. It’s just a cool drink, right? Or a chocolate bar or packet of chips as you walk down the road or pay for your groceries? Well, if you do this every day it adds up to a lot of money that you could have pooled and spent with more impact.
A R10-chocolate won’t pay your loan instalment at the end of the month. However, if you buy one every day, that’s R300 for the month – which is a significant amount that can help you with getting out of debt.
So let’s look at some other ways you can save money every day.
The best way to manage your money is to have a system. It doesn’t have to complicated (in fact, it shouldn’t be). All you really need is a budget and a way to track and record your expenses.
A budget is simply your plan for how you spend your money. This plan stands on two legs:
The best way to draw up a first-time budget is to track your expenses for a month or two. Use your existing spending pattern to draw up a draft budget, and compare it to the two legs mentioned above: Does your budget cover all your necessary expenses? And will the way you spend your money help you to achieve your goals?
Use the answers to these two questions to adjust your budget. For instance, to achieve your goals you will have to save money, which probably means you have to cut down on expenses to free up money that you can set aside. Those mindless day-to-day expenses are often the best place to start freeing up cash.
The process of tracking expenses and refining your budget is ongoing – do it every month and you will see your money situation improve.
Even with a budget in place, you could slide back into bad money habits if you don’t spend your money more consciously. Do any of these spending reasons sound familiar?
With a bit of planning and effort, you can cut out a lot of everyday expenses, such as takeaway food and drinks. It doesn’t mean you can never treat yourself to lunch or a drink, but if you bring your own food from home four times a week, the impact on your expenses will be significant. Other ideas are:
You have probably heard many of these tips before, but they really work:
Most of our unnecessary day-to-day expenses happen because of a planning blind spot. Here are some tips to do things differently:
It is easy to feel as if you are at the mercy of your money, but by paying attention to your personal budget and spending your money more consciously, you can change it.Go back