Budget Management

How Do We Manage to Spend More Than We Gain?


I have always kept an eye on the household budget, to tightly manage the income and expenses, in order to save some for the future. Not doing a great job though, in the light of recent calculations, although I have succeeded in at least realizing that I do spend more than I make. How is that even possible? Anyhow, while monitoring the ins and outs, I did find some successful tips for a budget management plan.

Micromanage your budget

In spite of all content on the web, advising us to stop micromanaging, when it comes to your household budget, we’re talking a different strategy, on which I am all in. Only recently, I have discovered a household budget manager app, which does all the hard work for you, called Expense Manager. All you have to do, is get the app on your phone and input all your money activity: incomes, expenses. The app will do for you all the calculations, charts and notifications you don’t have time for. At any moment in time you can check your balance, which can help you understand where your money are going, and when is the time to stop them from leaving you.

Be aware of your expenses

In no time, you will start to become aware, first, of the fact that you are successfully spending more than you actually make. Bummer, right? So, what next? Check your category expenses, fix costs and variable / impulse buying. Sort out the things you absolutely, necessarily need to spend your money on (such as utilities, transportation, food, medication, etc.), from those that are barely nice to have things, but could bare postponing (like technology, spas, every night snacks, toys, etc.). Try to understand what is most important to you of all these things. Split them into categories, add up the costs and draw a line where your budget is the actual one. Everything else can be turned into savings.

Put a limit on your budget

This is where the hard part comes in. As a marketer, I deal with budget management on a daily basis. Each project has its own assigned budget, which I need to monitor in order to avoid overspending. As a consequence, someone once advised me, and I quote: “Look at your budget and see what you can do with it in order to reach your set results. Then cut it in half and figure out an activity plan with the same outcome in mind. Then cut it again and find a way!” Only then you will see the profit coming. It’s doable; harder, but feasible. Think of it this way: if you can spend 1$ on a chocolate chips icecream, why would you give more for the same sort of thing, with just a few more chips on top? What is the added value here?

Set up a savings plan

Don’t be afraid of dreaming big, of wanting things that may be out of reach for your current financial situation. Decide what you need or want to do in the future. Maybe you want a fancy vacation, or a new car. Or maybe you want to open up your own business. Make a plan for a long term investment. Find a motivation that will make you cut on those things that you do not really need, in order to spend them on something that will trully bring you the satisfaction you’re looking for. And most importantly, don’t let time be an issue. Don’t add such limiting constraints to your plans. Whether it all happens tomorrow, a week from now, or years ahead, you at least have a destination in mind.

Maintain a positive attitude and always spend your money with a goal in mind: if I spend this sum of money now, what will I get in return? Money come and go, but is important that you always get them back through the value of your experiences.

Budget Management

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