We all know that we should spend less than we make – that’s just common sense. But sometimes the difference between a want and a need can become fuzzy (hello Urban Decay Alice in Wonderland Palette) and our resolve to stick to a budget starts to slip. I work hard, I deserve to treat myself once in a while, right?
I have gone through cycles of being extremely responsible with my money, then starting to slack off, then sliding into all-out stupidity. Next thing I know, I am 35 years old, and am starting all over. When a life-altering event happens, like a fire or separating from my husband, I am able to quickly cut down to actual necessities and denying myself a stupid purchase can be the difference between paying my bills this month or coming up short. There are a few major things that need to remain priorities in your financial life, whether you are in a comfortable place, or survival mode.
Paying Off Debt
Dave Ramsey says you need to get mad at your debt. I recently paid off my car, which feels AMAZING, but I could have had it paid off a lot sooner if I would have been mad at that payment. When I bought the car I was able to put quite a bit down, and trade in my old one, so I had a really “affordable” payment. But as I was making that payment, I was NOT able to fund things like a down payment on a house, or even retirement. For almost 5 years of my life I was unable to contribute to those things – that ARE life-altering – because I was paying for something that is depreciating in value as we speak, and will probably impact my life for less than 10 years.
Get mad at that debt, and pay it off like your butt is on fire! When things are comfortable, it may not seem like a crisis situation. But when something happens, and inevitably something will, you will wish you had been more diligent.
Keep Your Expenses Bare Bones
I’ve always felt my expenses were pretty bare bones – until suddenly I had to survive on just my income. I immediately cut our grocery budget down to $25 per person, per week, changed our internet plan, and cancelled several subscription services. I had justified faster internet because I DO earn half of my income online, but downgrading our internet plan instantly saved me $80 a month! A few years ago I shopped around on car insurance and was able to save a substantial amount of money, too.
I’ve often prided myself on the amount of money I save by not having cable, but we were subscribed to Netflix, Hulu, and we have Amazon Prime. That’s $30 a month. Now we only have Amazon Prime, and a rabbit ears antenna on the TV to watch local programming. We still watch too much TV, so we definitely don’t NEED additional streaming services! And that extra $20 a month will fund one of several categories in my budget.
Don’t Use Your Budget As A Guideline
I have a very irregular income, so a written monthly budget has always been a struggle for me. I have been guilty of using it more as a guideline than a set-in-stone plan, and changing things on the fly throughout the month. Don’t do that! You will overspend every time. This is why it is so important to be realistic with your budgeting amounts. If you are consistently overspending in a category, then you need to increase the amount you budget for that category.
This is where using cash becomes vital. If you don’t put a certain amount of cash in each envelope, but instead swipe your debit card with the intention of only spending so much, you will overspend almost every single time.
Cash envelopes have helped me to better plan ahead for expenses, too. Instead of being “surprised” by birthdays, I think about what gift-giving occasions are coming up while I am planning my budget for the month. If I notice my insurance envelope isn’t very fat and I know my biannual payment is coming up, I increase the amount I budget.
I never thought I would lose everything in a fire. Until I did. I definitely would have never expected to be facing single hood again in my mid thirties, but here I am. It is so vital to live below your means, because at some point in your life disaster WILL strike.
For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ Or what king, going out to encounter another king in war, will not sit down first and deliberate whether he is able with ten thousand to meet him who comes against him with twenty thousand? And if not, while the other is yet a great way off, he sends a delegation and asks for terms of peace. Luke 14:28-33
Don’t spend every penny you make so you CAN set aside money for those unseen calamities. The better prepared you are, the less those situations feel like emergencies and the more they seem like mere annoyances.
Does your money end before your month does, or are you able to live below your means?