The money in your pocket or your account at any one time depends more on how you think about money and what you do with it, than on how much you earn. For real!
Most of us are convinced that a bigger pay cheque will make all our money problems disappear. So, we work longer hours, put in more overtime and even start a hustle on the side. But still it is a struggle to get to month end and pay all the bills.
The answer is that you have a leaky bucket. The money comes in at the top, but pours out almost just as fast through all the holes in your life. Holes like a takeaway here or a cute T-shirt there. Bigger holes like a phone upgrade when it’s not necessary or a new smartwatch cause it’s the thing to have. There are also holes that feel unavoidable, such as a new schoolbag for your child or having your car repaired.
Leaky buckets are a feature of most people’s lives. Often more so when we earn a good salary and can afford to go out for drinks, or pull into McDonald’s for a coffee or breakfast on the way to work.
Finding the leaks in your money bucket and fixing them is one of the most important things you can do to get your money to work for you. Once the money stops flowing out without you noticing, you can start directing it towards the things you really want and the big goals you want to achieve.
1. Follow the money and find out where it goes.
Write down every rand you spend and add it all up at the end of the month. Then decide which of your purchases were necessary, and which were spur-of-the-moment things that you didn’t need – or even really wanted.
2. Tell the money where to go by drawing up a budget.
Use what you have learned from your expense tracking to make conscious decisions about how you want to spend your money. Plugging the leaky budget does not mean that you stop having fun; it means that you do so with your budget in mind, and that you are fully aware of what you spend your money on.
3. Make better money decisions by understanding what matters to you.
If being with your friends is your best, then talk to them about how your outings can be less extravagant. Chances are that other people in your circle are struggling with leaky buckets too! If time to yourself makes you feel like a million bucks, think about how to do so without blowing the budget. For example, instead of a massage every week, go once a month and in between read a book while having a coffee in your favourite coffee shop.
4. Set bigger, more inspiring goals for yourself and start saving towards them.
When you give your money a powerful purpose, it becomes easy to say “no” to the leaks and “yes” to keeping as much money as you can in your bucket.
Managing your money is the ultimate get-rich scheme. Tracking your expenses shows you where your money goes and helps you gain control over it. You don’t have to wait for someone to give you a salary increase – managing your money is entirely in your own hands. It is the most lucrative thing you can do with your time and money right now.For more information on financial wellness visit: Information centre Go back