When it comes to finances, a lot of people are enjoying life too much without any regard for the future, while others save as much as they can for tomorrow, completely forgetting to enjoy today.
And then, of course, you have those few people who manage to balance their finances in a way that allows them to enjoy today while still managing to save up for tomorrow. No, it’s not just about them having huge salaries or rich families. It’s more than that.
Here are a few tips that would help you mix today’s fun with thoughts for your future:
Have a deep understanding of your cash flow.
When we say deep understanding, we’re not just talking about how much comes in and how much goes out. Analyze every bit of spending. Be aware of the expenses that were completely necessary as opposed to the ones that were not really essential.
You can choose to keep a weekly spending tracker or a monthly one. It all depends on what you think would fit your earning and spending pattern the most. Once you have a full understanding of your cash flow, it would be easier to find the areas that you can adjust to make way for bigger savings without having to get rid of all expenses that fall under leisure.
Make a list of your plans and rank them according to priority.
Are you planning on finally taking that dream trip to the Maldives next year? Then put that right on top of your list. This way, you can easily weigh your non-essential expenses and figure out which ones would be worth saying no to just so you can make your big plans push through.
If you know that you’re anticipating the release of that brand new phone next month for example, it’s going to be easier to say no to that shopping trip with your sister this weekend. But if your priority is to build your wardrobe, then you can always shop now and forget about the new phone.
Limit your monthly bills.
Sure, all the bills you’re paying are necessities. But should you really be paying that much?
Start looking at all your monthly bills and find ways to limit them. Do you feel that you’re paying too much for electricity? Then encourage the entire household to start conserving energy. Is your monthly phone bill too high? Then maybe it’s about time you switched to a cheaper mobile plan. Otherwise, limit your calls and data usage.
You can even check your groceries and see if you frequently have leftovers that you end up throwing away, or things left in the pantry that never get used or eaten. Maybe it’s about time you practiced more discipline as you grab things on the grocery shelves.
By limiting these monthly bills, you don’t necessarily get rid of the necessary expenses. Rather, you are only avoiding the huge waste that you could be incurring month after month.
Have a specific savings account for each goal.
Let’s say you want to have a fabulous trip abroad next year, and would also want to finally buy your own home in 5 years. Instead of having a single account, set up a separate account for your trip, and another one for the house you’ll be buying. Every time your salary comes in, transfer money into these accounts right away.
Just make sure that you also set aside the right amount of savings every month, as you could end up saving enough for all your future plans but not being able to afford your daily living costs. Make sure you only maintain one or two additional savings accounts at a time as well, especially if you aren’t earning that well just yet. You can always add more accounts later on, when you feel that you’re already more financially stable.
What happens after you’ve gone on the trip, or bought the house? You can then plan for your next big dream that you have and continue sending money to these accounts for that purpose.
Have an ‘instant satisfaction’ fund.
You just can’t avoid those days when you’re craving for a tub of ice cream or would suddenly like to try out this great new resto a few blocks from your place. This is what your ‘instant satisfaction’ fund would be for.
Set aside some money each week or each month (depending on how often money comes in) to be used solely for spur of the moment plans. Didn’t expect that your favorite store would have a sale this weekend? This is what this budget is for.
What happens if the month has ended and the budget is left untouched? You can go ahead and use it for next month’s funds, or you can add it to your savings account and start a new fund for the month. It’s all up to you.
Always set aside your savings first before spending on anything else.
Here’s the regular cycle of a regular person – get paid, spend all the money, promise oneself that you’ll save a little something next payday, repeat the process.
Until you let go of that fear of running out of money to spend because of saving too much, you’ll never be able to afford the good stuff today while saving for your future at the same time.
The moment you get paid, send money towards your savings funds first. After that, distribute the rest of what’s left for the rest of your expenses, both essential and non-essential. You’ll find that you’ll be able to adjust your spending according to how much you have left. This time though, even if you spend it all, you already have money put aside safely in your accounts.
Always give back to the universe.
You may believe that the universe gives back whatever it receives. You may believe that God rewards those who do good. You may even be an atheist who just wants to do good. Regardless of what your beliefs may be, something remains constant.
Whatever you sow, you reap. Whatever you do to your brethren, they will do unto you. What goes around comes around.
Always set aside an extra fund for you to use to give back to society. You could choose a charitable institution, or you could organize your own thing. A monthly feeding program perhaps, or you could tutor kids whose parents could not afford to send them to school.
What does this have to do with money? Well, it’s pretty basic. You can always reap rewards in so many different ways. If you have a business, more people may start promoting your business because they know that you deserve to earn more so that you can give more. You could be seen as a model citizen and have better opportunities to get promoted and get a huge raise.
You can also consider the non-monetary rewards, such as brownie points in heaven or just that satisfied and peaceful feeling of being able to help people. That doesn’t only feed your soul today, it also secures your spiritual future.
It’s going to take some time, but the earlier you start with this new routine, the quicker you see the results. Apply these tips to the way you handle money and notice how you’ll be able to finally afford the things you have always wanted while still having enough for your future.Special thanks to Pictures of Money for the main image.