Sticking to Your Budget
I get it. You never seem to have enough money to last you through the month. There are little things that pop up during the month that you have not budgeted for like the travelling zoo coming to school, or your son's hockey shinpads all of sudden doesn't fit anymore or your daughter lost her pencil case at school....and then your car starts making funny noises that you just can't ignore anymore. Where's the money supposed to come from?
As a mom you realise that you need to take control of your family's finances and try to find ways to save. This can all be very daunting, but the trick is to take it one step at a time. If you try to do all the things all at once it will be a recipe for failure. This article should give you a few ideas on where to start.
Full disclosure: I am not a financial expert, just a mommy that is also in the daily struggle of sorting out my family's finances.
Here are a few tips I would like to share with you:
1. Budget
I know, I know. How can I budget if I am currently living from paycheck to paycheck?
That's exactly why you need a budget and you have to try your best to stick to it. Budgeting can be hard. Between a full time job, running a family and a household, you might feel that you don't have the time to set up a budget. But if you get your mindset right and you really, really want to save money and work towards financial stability, you will have to put in some work.
You can start by downloading 3 to 6 months of your bank statements. You have to go through every purchase you made and categorise it. Yes, this will take time but believe me it is absolutely worth it. This is so you can understand where your money is going and where you can cut expenses. When you have that sorted out, you can now set up your monthly budget. You can do this in writing, or use a free app. Or you can use an excel sheet. The beauty of an excel sheet is you can use formulas that calculate and do the work for you. Just an FYI, I developed a very easy-to-use budgeting excel sheet which I have been using for years. You can purchase this sheet in my shop. It's cheap and you can use it over and over, only pay once.
2. Cut all unnecessary spending
Okay so you have tracked your spending habits. And let's be honest, there are a few things that you did not need to buy. You can cut those expenses. But it is important to also be real. If you love your morning coffee from Plato, keep doing that. Maybe just don't do it every day and be sure to put that in your budget. (Then you won't feel so guilty)
Another way to cut expenses is to be mindful when you shop. Keep an eye out on sales and specials. Join Facebook groups like Supermarkets and Grocers for your favourite grocery specials or 1 Family 1 stockpile for advice on stockpiling and saving money. These are very helpful tools. You can also cancel any subscriptions you don't need. Shop second hand if you can. Make your favourite take aways at home. Do some research on how to minimise electric bills. Learn more about the cashback or rewards on your shopper cards like Checkers Xtra savings, Dischem benefits, Pick n Pay Smart Shopper and what they can offer you. All it takes is a bit of time to educate yourself and finding creative ways to save.
3. Plan for those extra costs that does not fall in your regular monthly budget.
You need to look into the future and anticipate upcoming expenses like birthdays, holidays, that annual gynecologist visit coming up. Make sure to put that in your budget. You will need to adjust your budget for that month to accommodate that expense. You can even put away money every month into an extra savings account. Most banks these days let you create those extra savings accounts on the app. Then, when the time comes, you already have the money.
4. Decide what your financial goals are
Your son has a rugby tour coming up in 3 months? Your daughter needs a new ballet leotard? You really want to take a family vacation for Christmas? You want to have funds available in an emergency fund?
To save money effectively, you need to know what you are saving towards. This will help you stay focused and motivated. It can be overwhelming but remember, one step at a time. Decide on what you are saving for, how much you need to save and then break it down into smaller goals. For example: You want to save 3 months worth of your income into an emergency fund. What is that number for you? Now, look at your budget. How much do you have that you can put towards that goal? Let's say for argument sake you need R45000 total. After looking at your budget, you now know that you can save an extra R2000 per month. So it will take you 22.5 months to do it.
Sounds daunting? Don't let it get to you. The important thing is that you just start. As time goes on, you might have some extra cash lying around. Put it towards your goal. You might get a bonus at work. Put it towards your goal. Your salary might increase. Put the extra money towards your goal. Always keep your goal in mind. You will thank yourself later.
And don't forget to add your savings amounts to your budget. Pay these first so you're not tempted to spend it on unnecessary things. Another way to make it easier on yourself is to set it up as a recurring transfer on your bank account.
5. Some other things to keep in mind
Debt.
We all have had it at some stage. Try and avoid it all costs but if you do already have debt, plan on how you are going to pay it off. Put that in your budget. There are a few different, proven strategies that work for paying off your debt. More on that coming later.
Side Hustle.
You don't have to quit your 9 to 5 but having that extra income might just be the answer to supplement your income. Find out what you are passionate about or something you are good at and make that your side hustle. It doesn't have to be big, you just need to start.
Avoid buying impulsively.
You really, really want that fancy hair straightener? Just make yourself wait a few days before buying. If you still really, really want it, go for it. But the chances are you will realise that for now, you are fine without it.
The envelope method.
If you are not so disciplined with your spending habits, consider using the envelop method. This is when you draw cash for a specific expense for example buying groceries. Keep that in an envelope and use that cash to pay for your groceries. When the cash is finished you know that you can't buy more.
Review your budget regularly.
Times and needs change. Make sure to review your budget every month.
Remember, sticking to your budget is going to be hard work at the beginning. But if I have to be honest with you, after a while it can become very rewarding when you see the results and it will become one of the most important things you can do for yourself and your family.
Photo by charlesdeluvio on Unsplash