Hey everyone! Here is the final section of budgeting made fun. We already talked about adding up all of our fixed costs like mortgage/rent, loans, taxes, electricity, etc. We then talked about how we can squeeze our other bills by calling the companies and trying to get a better rate. I hear success stories from clients all the time after doing this! Remember that honey gets more bees. Be super sweet to the customer service rep but demand to match a competitor’s price that you’ve seen or threaten to cancel. All of those savings will now be pumped back into things you love like trips, dinners with friends, or a retirement in Fiji. Whoop.
Take three months of statements and see how much money went to clothing, coffee, lunches out, movies, restaurants, and other miscelaneous areas. I bet this number will shock you! With unlimited swipes of a debit or credit card we normally stop spending when our money is all gone. Today, we change all that.
Look at your last three months statements and figure out how much you spent. Now think if you really enjoyed any of those purchased to their fullest. OR, would you have much preferred that money going somewhere else?
Take your average spending amount on miscellaneous items from the last three weeks and then cut it in half. Then divide by the number of weeks that are in your current month. If you spend an average of $2,000 on dinners, drinks, and good times, now $1,000 will be your monthly amount. If there are four weeks in the upcoming month then divide the $1,000 by 4 = $250. That is your weekly variable spending amount.
On Sunday go to the bank machine and take out your $250. Go get some jars, envelopes or some other divider and now plan out the week. If you have dinner with Aunty Gertrude then you need to have $100 on Wednesday night. If you need $500 totally fierce pumps – you need to save $100 for five weeks to get them. What, you say? Saving before you spend? I know it’s crazy, but you’ll fall in love with your fierce pumps that much deeper when you pay cash for them. You might even pass them up? Ohhhhhh snap.
We now have set you up so that everything that has to come out, comes out, including money towards retirement an your goals. Now you’ve put a cash ceiling on your clothing, dinner and fun times spending. You’ll be amazed how well this works. Love your money and it’ll love you back with an auto fantastic financial life.
Have a super fun all cash week money peeps,
Dave
