Have you imagined what it would be like to get out of debt? I know budgeting can be tough and probably the main reason you can’t dig yourself out of debt. So, if this is the case for you, check out these 3 tips that’ll help solve all your budgeting mistakes.
This past year I worked my butt off. After working 60 plus hours a week for 8.5 months straight, I could only dream of the day I became debt-free.
So when the day finally came, I was super excited. I can tell you that nothing compares to the feeling of being debt-free. It’s the moment I reminded myself of every time I felt like quitting
I had my $1,000 emergency fund saved up, I was completely debt-free, and I finally start working towards saving my 6-month living expenses.
My partime job helped me out a lot, and I had no intention to quit, even after I paid off my debt. I was making good money and relying on that extra cash to help me save up as much as possible for the rest of 2020 to move out. I was unstoppable.
But let me tell you something. I didn’t expect the country to shut down and go into quarantine.
So what happens when you when you’re income drops unexpectedly, and you overspend at the same time? You go right back into debt. You see, the dang cycle continues if you aren’t careful.
It sucks to admit this, but after being debt-free for two months, I got right back into debt. No, not by thousands. I just trickled back to my old habits, spent more than I can afford this month, and pretty much ignored my budget.
I should’ve gone back and adjusted my new monthly spending limit, but I didn’t.
Luckily, this past week I picked up the book Worry-Free Money by Shannon Lee Simmons and let me tell you I learned a lot.
So, if you’re struggling to save, are always going in debt, and feeling broke, this is something you’ll want to read.
Keep reading because I’m going to go over the three reasons why you can’t stick to your budget.
1. You have way too many F*&% It Moments
I have had way too many of these moments. It was almost like, eh, I don’t see it, so it won’t hurt, what’s another $20, $50, or $100. I’m broke anyways, might as well enjoy life, F%*& it!
But are you really broke? Or do you just feel like you are because you’re an unorganized financial hot mess?
Do this for me, grab a glass of wine, play good music, and layout ALL I mean all your financial shit out.
Because feeling broke, usually happens when you completely ignore how much money you’re bringing in and have no clue where your money is going. Stop throwing your money away.
2. You’re trying to budget for the life you Think you want
See, traveling changed everything for me; I saw how much simpler life could be and realized I’d bought things in the past when I didn’t even care for them. Before, it was all about who had the best outfit, the newest shoes, the best iPhone, or whatever. And as I got older, it turned to the new car or the new house.
But, that’s because those are the “things” we grew up thinking that we are supposed to buy, right?
In the book, Worry-Free Money, Shannon talks about comparing yourself to others. “Keeping up with the Jones’s.” If you haven’t heard of this term before, let me explain. “The Joneses” are the people in your circle, your friends. They don’t have less or more than you, but they are sitting juuuuust about where you are financially.
And I mean, if they can do/afford something, then you must be able to afford it also, right?
For example, I don’t own a home; not all of my friends own homes either, but a fair amount do. And sometimes I catch myself feeling left behind or the pressure to have to own a home by now because I see it on social media. But is it what I want? Or is it something I “think” I want because I’m trying to keep up with “The Joneses.”
Think about what you spend money on and then ask yourself these two questions.
1.) Does it bring you happiness, meaning does it bring you a high emotional return on investment?
2.) Can afford this purchase, wherein the long term it won’t sabotage your happiness?
If the answer isn’t no to even one of those questions, get rid of trying to squeeze it in your budget.
This way, you can make room in the budget for the things that actually matter to you; for me, it’s travel.
3. You’re cutting out the wrong expenses from your budget
If you want to get out of debt, you’ll hear this a million times over and over. Cut the coffee, stop eating out, drive less, cut the cable, and so on.
And so you do. You tried cutting out the coffee, eating out, you even packed your lunch, all that jazz everyone tells you to do. But you’re still going over your budget, and now you just think you suck at budgeting.
But what if getting a cup of coffee in the morning is YOUR thing? What if eating out at least once a week is something you look forward to?
Cutting back on the things you “think” you need to cut back on isn’t going to help.
You see, it sucks being told you can’t spend money on the things that make you happiest. So let’s try this.
Write out your expenses and rate each one on a scale of 1 – 5. After you’ve done this, total everything up and see how far or close you are to your monthly spending limit budget.
Your job now is to cut your expenses down to match your monthly spending limit.
Do you see those expenses that you rated at a 1 and 2 there? Ask yourself if you can cut back on the spending there or cut out that expense in general.
Lower your spending on things that you rated low on the 1 – 5 scale so you can make room to budget more money on the things you rated a 5.
Now you can stop feeling guilty for spending money on things that make you happy because you’ve budgeted for them.
Sticking to a budget is an emotional thing for sure. So when you don’t stick to it, you say screw it.
This is why giving yourself a monthly hard spending limit works.
Because this is the money, your free to spend it on whatever you want. So long as long as you don’t go over your limit.
So, I need you to get real with your financial numbers, so you can stop feeling broke and having F%&* It, moments.
Find out how much your monthly spending limit really is. Remember, this is the money you are free to use after setting aside money for all your monthly bills and savings.
Stop comparing yourself to others and understand what your happy spending looks like.