Last week we examined how to cut back on spending and create a life goals budget, this week we look at how to create a monthly savings budget, how to budget with cash envelopes and explore how to evaluate your earnings strategically.
Monthly savings budget – five year plan
Now plan how you are going to allocate your savings to your goals each month, using the life goals budget as guidance to when you will start saving and for how long. Also bare in mind when the goal is due to be completed and take into account the more minor things you will need to save for like birthdays, anniversaries or Christmas. This is the stage where you will clearly see how you are able to realize your goals financially and it is an incredibly powerful exercise, one which will empower you to create the life you long for!
Ever since I started to work within a budget I made a point of using cash whenever I could and withdrawing the cash I needed for the month from my bank after pay day. I then put the money into envelopes, and write on each envelope what it is for, the date it is to be used and the amount – for example, ‘entertainment – July – 100’. I then put the envelopes in a secure drawer and whenever I go out I ensure that I don’t spend beyond what I have in cash, unless in the case of an emergency when I would venture to use my card.
Working with cash in this way not only allows us to clearly identify when and why we might overspend but it makes us more cognizant of where our money is going and allows us to better appreciate the value of money.
Evaluating your earnings strategically
If after doing a comprehensive budget it becomes clear you do not have enough income to support your goals take time to consider whether you would like to develop your career by retraining, taking on more responsibility or studying towards a professional qualification in order to warrant a higher salary.
When evaluating these possibilities take into account the financial investment vs returns, the time involved and ultimately whether the job following developing your career would offer you the work / life balance you are seeking.
For example, if such a job is likely to have much longer hours and considerably more stress, can you justify this in terms of your quality of life? To read more on stress please read my article titled ‘Tis the season to be stressed; How to leave stress behind you for good’ which reveals how to drastically reduce stress and is applicable year through.
In truth it takes a great deal of determination and discipline to stick to a budget however the rewards are well worth it. With a realistic and carefully planned budget you can ensure you are financially secure and able to deal with life’s unpredictable setbacks that might otherwise leave you on shaky financial ground. Not only does a budget ensure security it enables us to guarantee our dreams and goals are realized. Join me in venturing into a life where your dreams become reality!
Have you filled in the downloadable spreadsheet and created a budget? If not has this series inspired you to begin creating your own budget to support your life goals? Were there any points this series raised that you hadn’t considered when creating a budget? Please share your thoughts in the comments below to gain encouragement, insight and support from our community, we’d love to hear from you.
‘How to Manage Your Money When You Don’t Have Any’ by Mr Erik Wecks