The past few years for everyone have been life changing.
For Europe the Brexit process and COVID pandemic has felt like a war. For the USA the presidential election was their additional stress.
Usually after a war, things start to look better. There is a sense of getting back to normal as soon as possible. Rebuilding. Going out and celebrating. Planning holidays and a better future.
Frustratingly for us all at the moment, there seems to be no respite. There are rising prices in almost every area of our lives and we haven't started seeing the worst.
Energy prices are set to double, possibly quadruple. Food prices are up month on month. Gas/Fuel for your car is increasing. You name it and it is all going up.
So what can you do about it? How can there be a positive angle to this situation?
The good news is there is always something you can do. The positive angle is to try and do that something in areas that will improve yourself and those around you whilst saving money.
So let's get into it. We know costs are going up and so common sense tells us that you must be able to cover those costs.
Another way to put it is, you will need to fiercely manage your income (what things bring you money to pay the bills each month i.e. Job) and your outgoings (what things do you pay for each month i.e. Netflix).
If you do not have a spreadsheet with these two columns then you absolutely must create one now.
Here is a link to a free Google spreadsheet template you can copy and use [Click here to view].
I will wait whilst you get your spreadsheet ready to view with all of your income and outgoings.
Are you ready? Great.
What I want you to do next is relook at the outgoings list. Please add the tag words "Essential" and "Non Essential" next to each line item.
So for example:
| Monthly Outgoings | Tags |
|---|---|
| Netflix | Non Essential |
| Pedicure | Non Essential |
| Groceries | Essential |
| Eating Out | Non Essential |
| Medical Fees | Essential |
| Loan | Essential |
I know what some of you are thinking! A pedicure is absolutely essential. Nice try.
Essential items mean that if you did not pay them you and your family would be in serious trouble. For example, if you do not eat then you will die.
Non essential items are things that you can live without. You will not die if you have to stop watching Netflix.
The point of doing this is for you to clearly see which items you can live without and how much money you will save.
I know I know, it seems all too depressing. Thanks to our parents and grand parents hard work and those who came before them, many of us have not had to struggle like they did. Many of us are not used to not having a paid prescription to watch our favourite shows.
Let me put your mind at rest. This isn't actually as bad as you might think. I am old enough to remember times when there was nothing being broadcast on television. I survived! You will cope very well. You will actually start to wake up and take a mindful look at the world around you. Books start to look more enticing to those who wouldn't normally read. Boardgames take on a new feeling.
This is not all doom and gloom. This is not forever, when things get better you can bring back the luxury monthly items and truly appreciate them. Changing your habits does not have to be a negative thing. In fact, this brings me nicely on to why cutting out the non essential things and saving money is a great opportunity to do something positive with your life.
Think outside of the box here. Look for ways that cutting things out will make you feel better.
For example, although "Groceries" is an essential item, you can still save by looking at what you buy and again using the "Essential" and "Non Esential" tagging system to take things out. Plus, why not match this with a goal such as losing weight. Remove all of the sugary items and you will be stunned how not having them helps you lose weight and feel more healthy. This tough time in your life is not about making you suffer; if you like sugary items that's fine, try to only have them once a week or month, perhaps use them as a reward if you achieve another personal goal you have set yourself. Be creative and make this whole budget cutting exercise fun and beneficial.
With regards to your income and what comes in each month. Again try to think outside the box. It may seem a crazy thought, but how about asking your employer if they will pay you more. Shock! Horror! I know! Scary thought, but what if they say yes!?? See if there are different ways you can invest any money you have left over each month, maybe find a bank account with more interest. Try and spread out what you have left into saving pots. One such pot could be labelled "Energy Bills", use this pot to take the sting off the rising energy prices.
Look, I do realise all of this advice is common sense and you probably know it, but I find that if someone else reminds me of the obvious, then it tends to sink in more, and helps me get on and do it. I hope all this has helped you think about budgeting in a different and positive way.
If you have any more ideas, please leave them in a the comments section below.
As always, take care today.
Author: Christian Jacques Bennett*
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Image by Jan Vašek from Pixabay
Image by mohamed Hassan from Pixabay
