People often ask me how I manage to stretch our money to incredible lengths, and the truth is; honesty. We are brutally honest with ourselves about our weaknesses, our temptations, our past financial “failures”, our priorities and our future. We are honest about our goals, what is more important and whether we are really working hard enough... We talk ourselves out of temptation and invest heavily into sweat equity. Through our experiences, we have found 3 reasons why honesty is the foundation of a successful budget;
When setting up a budget, you must start by being honest about your current spending behaviour, including; temptations, habits and triggers. Do you shop online when you’re bored? Do you meet friends at a shopping centre for a “quick lap”? Do you overspend on gifts to feel appreciated? If you have patterns of spending behaviour that are keeping your finances in the “black”, it’s time to be honest about why you spend and whether you can make some simple changes to your lifestyle to stretch your income further.
Do you often set up a budget and overspend on living expenses within a few weeks or months? Do you feel like your money doesn’t stretch far enough? This could be a result of not being honest about the real cost of your living expenses... Your budget needs to be extremely honest to be sustainable and effective... Set a budget to cover absolutely every living expense and stick to it!
Are you really working hard enough? Are you spending more time on the Internet spending money, rather than earning money? Can you read a book instead of indulging in a shopping spree? Could you bake instead of buying snacks? Can you walk or ride a bike instead of using your vehicle (saving on a gym membership in the process)? How hard are you willing to work to build your financial dreams? Can you create a side business to boost your savings?
It really doesn’t matter how old you are, how many children you have (if any) or the amount of debt you are facing, it is impossible to live a financially secure and debt free life if you aren’t willing to be truly honest with yourself...
Be productive. Be proactive. Be humble.