Three years of budgeting during university has equipped me with a few trusty techniques for managing my spending.
Whether it’s a simple change in habit such as curbing your impulse purchases, a change in attitude such as learning to ignore fashion trends, or a change in mindset such as adopting a more minimalist approach to life, I’ve found that managing your spending can be a very achievable and satisfying challenge.
1) Make a budget…
When I went to university and had to manage my finances for the first time, I was advised by my dad to make a budget. The budget should account for my daily expenses (rent, food, going out, treats), the more occasional expenses (travel, holidays), and also some leftovers for savings or unexpected costs.
Once you have your budget clear in your mind, it’s easier to control your spending and have a good idea of where your money is going.
2) …and stick to it
Making a budget is simple enough, sticking to it is the hard part. Luckily for me, I was introduced to a beautifully simple technique by my dad. So beautifully simple, all you need is some envelopes labelled with your various expenses. The idea is that you work out a budget and then put the designated amount of money into each of envelopes. During university I had envelopes for travel, food shopping, going out, treat money, etc.
The great thing is that all your money is kept separate and anything you don’t spend that week becomes savings. Opening your treat money envelope and finding a stack of unspent money inside is always an exciting thing and it means that you can go out and treat yourself without the guilt.
3) Ignore the trends
If you’ve got a ‘keeping up with the Jones’s’ mentality, it’s going to make it harder to stick to a budget. If the newest Iphone model comes out, you’ll feel like you have to have it. Or once fashion trends change, you’ll feel like you have to update your wardrobe to fit in with everybody else.
It’s far easier to stick to your budget if you choose to ignore the trends and instead follow your own path, develop your own tastes. Not only does this reduce impulse spending, but I think it’s good for your wellbeing to be able to turn down the tempting messages of advertisers and only spend your money on things that are actually going to make you happy.
4) Decide what’s important to you
A good way that I manage my spending is to have a clear idea of what is important for me to spend my money on. When you’ve got a fixed budget, and especially if that budget is on the smaller side, it’s not going to be possible to buy everything you want to buy. So be clear on your priorities and ask yourself if the things you’re purchasing are actually going to make you happier.
I decided early on in university that spending money on things like socialising, going to the cinema, going for date nights with my boyfriend, was going to make me happier than constantly updating my wardrobe. I decided that experiences were more important to me than things and I adjusted my budget accordingly.
5) Understand your impulses
I think it’s safe to assume that everyone is guilty of making impulse purchases from time to time. Maybe you see a beautiful pair of leather boots, or a book that sounds really good, or a blanket that would look really nice on your bed. For me, I’ve always had a strange obsession with notebooks…I just love buying new notebooks.
Once you understand the impulse purchases you’re likely to make, it’s easier to control them. When I pick up a notebook in a shop and convince myself that I have to have it, I take a moment to ask myself whether I really need another one. Then I put it back and carry on with my day. The more you get into a habit of not buying the things you’re usually drawn to, the more you’ll be able to save your money for things that are actually going to make you happy.
6) Sleep on it
Another good technique for managing your impulse spending, is to take some time to think about something you’re considering buying. Let’s say that you see a pair of shoes that you really want. Instead of buying them on the spot, take a few days to consider whether they’re really that comfortable, whether they go with your other clothes, whether you already have a pair just like them, whether they’ll be durable, whether you can afford them. If after those few days you still decide that you want them, you can go back and buy them knowing that it’s the right decision.
This is especially good when you’re considering buying something that’s more expensive because you’ll feel less guilty spending the money knowing that you’ve really thought through the purchase.
7) Treat yourself from time to time
I’m a big advocate for having a balanced approach to life. There’s a great quote: “Everything in moderation, even moderation.” In terms of sticking to a budget, it’s sometimes good to treat yourself. Let’s say that you’ve been really good recently, why not reward yourself by going for a more expensive meal with a friend and not worrying too much about the cost.
It’s all well and good being sensible with your spending, but if taken to the extreme, you can stray into becoming too frugal or too tight with your money and that doesn’t equate to happiness either.
8) Adopt a minimalist mindset
If you’re really struggling to curb your spending habits and stick to a budget, I’d recommend watching the brilliant Netflix documentary Minimalism. Their basic message is that always spending, spending, spending to buy more stuff isn’t what happiness is all about. A simple life with the bare essentials is so much more freeing than a life weighed under a mountain of possessions.
Since watching the documentary, I’ve realised how much more satisfying it is to have less stuff and adopt instead a less is more attitude to spending.
– Tiger Lily –