Budgeting – That Dreaded Word!
Budget – (Noun) an estimate, often itemized, of expected income and expense for a given period in the future.
Budget – (Adjective) reasonably or cheaply priced.
Both words alarm me, both words resound with me. I have never understood how people managed to commit to the noun version of the word and when sticking to their “budget” they don’t end up drowning in the adjective version of the word!
If we are honest and really look at ourselves in the mirror, we all know that to secure our future we need to budget and spend less than what we earn. That means we have to ensure that we limit the smashed avocado on toast every morning at the chic cafe down the road (to at least once a week anyway) and go on a home made picnic instead of spending the money at the amusement park the kids are hankering for!
And often when we think we are budgeting we go for “cheap” or “budget” items that quickly become JUNK! I hate that. There’s nothing worse than crappy stuff that frustrates and breaks down every time you look at it, let alone use it!
That’s where we need to budget so we can afford good quality items when we need them. Read that sentence again – That’s where we need to budget so we can afford good quality items when we need them! The key words are – budget, quality & need! If we have all the steps in the process working in great order, we will have money to afford the quality of the items we need! Easy right? Wrong! But below I have outlined a tip that I have found has helped out on occasion to work out if it’s a quality item I need!
Divide the item cost into hours worked and then see if you still desire it!
This book on http://www.bookdepository.com costs NZD $100 and after tax I get paid a little more than NZD $20 but I’ll leave it at $20 to make the calculations nice & easy!
Now divide $100 by 20 = 5 hours
To buy this book I would have to work for five hours!! Still want the book? No thanks! I’d rather have 5 hours of non-working freedom!
This tip took a while to lodge it’s self in my brain, but now that it has I recommend it to any one that cares to listen. More often than not if you think about your spending money as hours worked (as that is literally what it is) you’ll find you would rather keep your money than buy whatever it is you “think” you need at that moment!
Try it – you might be buying an early retirement!