“Say NO!” — 7 rules for the only budget you will ever need!

When I think of budgeting, I think, why don’t I just earn more money? Or start a side hustle so I can keep my current lifestyle and still buy the latest Yeezy’s on release (joking, who has time to line up for sneakers..).

But seriously, a budget is like a diet for most people. You get the idea in your head, you plan to start your diet on a Monday and after 4 weeks off knocking back muffins and cookies you might lose 3kgs. Or alternatively if you just budget for 2 months and say no to buying lunch every day and going out for Friday night drinks after work, you might have enough money to buy that Coachella ticket you always wanted.

The problem with budgeting and dieting is that after a long week at work and a busy life that we all live, there is only so much willpower we have before something has to give. i.e online shopping or eating a tub of ice cream.

So where to start in the only budget you will ever need.

Rule Number One:
Keep it as simple as possible. Let’s get an excel spreadsheet (how fun) and write your monthly income. Underneath, list your direct debit expenses. Only list things that come out consistently, e.g. mortgage, health insurance, phone bill etc. Why don’t we list groceries and shopping? Because of a certain old mindset we have…we live to our means. For example if I make $300 a week and my expenses are $150, I will definitely spend $150 on groceries. Whereas the weeks I cut it fine and leave myself with $90 on groceries, I always make it work. Why is that? I still have all my food for the week, plenty of dog food and I make sure I always have the latest Rexona deodorant. The trick to money is essentially, out of sight out of mind.

Rule Number Two:
You need a goal. You cannot stay focused without a clear mindset on why you are doing something. For example when my partner and I where saving for a house deposit, we spoke to someone in the mortgage industry to give us a clear, real dollar amount on what we needed. Studies show that our mindset adapts faster to what it wants (i.e house deposit) when it is clearly defined. That’s why every self-help book says to write your goals down..After all these years. I get it. 
 Saying you want to save for a house is great in theory, but when you say that you need to save $800 a fortnight to have enough for your house deposit by the 17th of July our results become defined. Putting a clear goal makes it tangible, for my case I could physically see what I needed to save to achieve the result I wanted.

Rule Number Three:
You have probably heard this all before but you need to put money away for your future. This will essentially feel like a % of your pay check you don’t see ever again.. Or until your 60 and retired (same thing..?). I know what your thinking, isn’t that what your superannuation is for? Yes, but your employer no longer pays the amount you truly need. In Australia you receive an average of 9.5% of your total income towards your superannuation. This is great in theory but lets be honest, if you are under the age of 40 you are more than likely never going to see government pensions to support you when you need it the most. So, lets be proactive about it now. Most research suggests 10% of your income set aside each pay will be great start, but I’m saying 15%. Once again out of sight out of mind.

Rule Number Four:
Pay more than the minimum on your debt. This includes people that only pay interest payments on their mortgage. If you don’t have a house, then pay more on your credit card or car loan payments. If you don’t have any debt then why are you wasting your time reading this (you are kicking goals)? People seem to have this idea that since mortgages are for such a long time that if this year I pay only interest payments then hopefully my financial situation will improve in the meantime and then I will start paying principal and interest. You might feel like you are barely making a dent in your debt but after years of putting in above minimal payments, you will see the light at the end of the tunnel. The trick to this one is always have perspective. I constantly remind myself how lucky I am to have a house and a car that gets me from A to B comfortably. In comparison to my parents who weren’t able to stay at home until there mid twenties until they found a house they could afford. They had to make tough decisions and make them work. Having perspective keeps you real as a person and grateful for your everyday life.

Rule Number Five:
Spend 10 minutes a week looking at your finances and daily transaction accounts. Oprah Whinfrey famously said once to Serena Williams “You sign every check (cheque). Never let anyone sign any checks (cheques)”. This doesn’t only relate to the super wealthy, but a great guide to keeping an eye on your money. Before I cared about my finances, I once found out that I was paying for two anti virus programs for my computer because the old one automatically renewed. That was essentially $102USD that I pissed away because I had already bought the new software but had also had ongoing payments for the old one. Sadly, I have many more examples where I was careless with my money. This made me get on top of my finances and I made sure each week I looked at my bank transactions to know where my money was going.

Rule Number Six:
Say no to people. If you really want to save money for your financial goals then you need to say no. It seems that everyone these days has such a huge fear of missing out (FOMO) that they say yes to everything. And I mean everything. Even things they don’t want to do. Building up your FOMO muscle is hard work, however the more you do it the more self control you have and the better you will eventually feel. Don’t get me wrong, saying no to going on a holiday with your friends is hard to do, especially when Instagram, Snapchat and Facebook reminds you on what you are missing out on. However, like every muscle the more you work on it the stronger it becomes. This also includes the friends cousin who says that a certain stock or investment is going off and you should buy it. Say NO! Do your own research and take control.

Rule Number Seven:
Take Action. You can read posts, blogs, books, videos and the list goes on. But how did our Grandparents budget for what they needed during the worst economical time our world has ever seen (the great depression)? They just spent less then they earned. Keep it simple!

Thank you for reading this post, of course there are always more things that could be added. But just aim to save more than you earn and put away what you need to achieve your goals and some for your future! That’s all.

On a side note, try selling 5 items you have at home that you no longer need, firstly this will help kickstart your savings. Secondly, you are recycling goods that is great for the world for so many reasons! Keep on smiling.