A lot of people think they need more – more income, more winnings, more money, somehow. I’ve always said that everyone has incomings, it’s how you distribute it which makes your life work or not. In other words, it’s a function of how you use it – your spending!
When you start a business, it’s essential that the runway to your financial well-being is as long as possible. Having it run out than you’re ready for lift-off may have you return to the workforce sooner than planned or expected. Your business may take 2 – 5 years, or even longer to return an income sufficient to support your family or partner’s wage, so to financially back your business, your family situation must be supported.
The fastest way to have more money now is to examine your current daily spending & regular bills. Now I’m not going to talk about regular bills here, I want to talk about the killer to most budgets – the incidental daily spending! For me the vice is good food & coffee!
I always introduce a spending tracker to my clients to keep a list of everyday spending. It’s called a SpendLog. It tallies all those little things that you don’t think about. So how does it tally those things that you don’t think about? Well, it’s a very traditional method…. are you ready? It’s called using pen & paper and a calculator!! Yup, no apps, no spreadsheets, no bank statements. You don’t learn swimming from an app, so you don’t learn to manage money from an app either – it’s by doing.
These days the tactility of cash is really amiss in our society. Psychological science says that when you write things down, you grasp more of the learning and understanding than using technology to note take. By writing your spending down daily, it’ll re-presence the tactility, and the insights of the learning will gradually reveal itself. There’s actually method to my madness. Like all things that require commitment, it can be a slow burn. But do this repetitively and for a long time, it’ll become habit – a great habit!
Some most common spending blow-outs I have noticed are:
Additional grocery items – need I say more? I fall victim to discounted or on special items (arrgh – their marketing have worked!), and leave the supermarket with a few more items than I should have. However, sticking to your list, or try ordering online will have you deviate less and not spending more than you should.
Eating Out – especially lunch and takeaways, it’s always cheaper to make your meals at home and bring leftovers, or make bulk and freeze for later.
Coffees – I’m from Melbourne so it’s a vice for me. However I limit myself to a purchased coffee once a day. If you have 2-3 daily, chances are you would have spent hundreds on coffees this year already!
Discounts & sales – the usual reasoning I always hear is “I saved $50! It was only $70 that I paid” Well you actually didn’t save anything, in fact you spent $70 and didn’t need to spend $120 instead! Marketing and advertising to have you buy NOW is about speaking to your FOMO-ness. We are all emotional creatures and we buy on impulse. So know yourself and just pause for a moment on your purchases to assess the need.
ATM fees – this is the odd one out, it’s not a “daily” incidental spend but it’s worth mentioning. ATM fees are around $2 per transaction when you withdraw cash from another financial institution’s ATM. Which reminds me to ask you, how often do you check your bank statements and add up all your ATM fees? If I need cash and I’m not near my bank’s ATM, I go to a large supermarket and request a cash out at any check-out or the service desk. It is fee free!
A really good way to pull yourself in when you’re out and about is to remind yourself what really matters – is this coffee going to make the difference towards your savings goal? What is the priority here? To enjoy your pack of Shapes during TV tonight, or to contribute those few dollars towards your kid’s pocket money. As an English proverb puts it nicely, “Take care of the Pennies, and the Pounds will take care of themselves”. Remember that every little cent counts!
Hi! My Name is Fay from Budgeting123! I am a financial readiness coach, mum and an avid writer. I am very passionate about everyday, personal money matters. Whether you are trying to buy your first home, second home or needing to clear some debt before making an investment I am here to help. I also specialise in providing clear and easy to follow budgets for both families and singles.