There’re a few things in life worthwhile to do like our life depends on it.
Keeping fit is one of them. Our longevity literally depends on it.
But since we can’t live a long and healthy life without being fed properly, being financially fit is just as important.
Not only that, we human beings are so complicated that a full stomach and a warm bed aren’t just enough.
We want something more and deeper: a sense of security, control and freedom of choice, all of which we lose when our health falters.
We lose those things all the same when our finance collapses.
So, we have every reason to keep financially fit as we do with our body.
And budgeting is essential to be financially fit and achieve financial freedom.
If you haven’t started budgeting, read this beginners’ budgeting guide, choose one (I recommend the first one) and stick to it.
And come back to this post.
The Cardinal Rule of Money
If you master this one cardinal rule of money, you’re going to live a financially independent life sooner than later.
The rest of the post will assist you to get there successfully.
And here’s the cardinal rule of money:
Live below your means.
Don’t spend more money than you have.
It means no more of ‘I’m going to buy this now with my credit card because I can pay off next month when I get paid.’
No. No. No.
Instead, wait until you actually get paid and have money in the bank.
This waiting does two things.
First, we build the right money habit: we don’t spend money we don’t have.
Second, the chances are we’ll change our mind about the things we wanted to buy. After giving ourselves time, we may realise that they aren’t so important as we thought they were.
Play waiting games long and often because most things aren’t so important.
Now that we know the cardinal rule of money, the below are little things we can do to ensure we stick to our budget.
25 Essential Budgeting Tips
1. Avoid Spartan Budget
Otherwise, taking a spartan approach from the get-go usually backfires and causes you to go over your budget.
Give yourself permission to be flexible, allow a little extra in your budget and make sure you stay within that boundary.
It’s easier to stick to the budget when you allow flexibility.
2. Pay Extra Attention to Your Vices
When we’re hungry or stressed, it’s easy to succumb to our vices: the comfort of food, drinks or mindless shopping.
For example, I used to buy food I wouldn’t normally eat during my grocery shopping when hungry. This would cause going over my grocery budget.
So I now make sure I never go grocery shopping on an empty stomach and stick to my grocery lists (no random picking!) and budget.
3. Keep Receipts for Everything
When we collect receipts for everything, we see the visible evidence of our spending habits right in front of us.
We buy small things here and there throughout the day, or every time we pass by a shop. We end up with 30+ receipts at the end of the month.
Seeing a pile of physical evidence can force us to change the way we shop to, say, once a week, which results in 4 receipts a month.
Mounting receipts can change the way we spend money and motivate us to stick to the budget.
4. Tally Up All Your Spending
Have a quick overview of your budget by tallying up your receipts at the end of the month.
Compare them to your budget and analyse where you overspend or underspend.
If necessary, adjust your existing budget to, for example, increase saving or reduce food expenses.
This little exercise once a month ensures you stick to the budget.
5. Cook Once for Two Meals
When you cook dinner, cook for two meals. One for dinner and the other for lunch the next day.
You cook what you like with ingredients you can name. It’s cheaper and healthier and ensures you stick to the budget.
6. Avoid Starbucks or Costa
Treating yourself with fancy coffee is absolutely fine.
Better still, include it in your budget. That’s you not being so spartan with your budget: you deserve a treat now and then.
Be aware though, a treat should be treated as eh… a treat.
Otherwise, its effect diminishes. It soon becomes a bad money habit that strays us from our budget.
7. Water Over Soda
Can you imagine swallowing ten spoonfuls of sugar at one go?
But that’s what we do all the time.
That nice lunch we chase down with a can of coke?
The coke alone – not counting sugar from food throughout the day – contains 9.75 teaspoons of sugar.
On a side note, daily recommended sugar for men is 9 teaspoons and for women 6 teaspoons.
Every time you’re about to touch a fizzy drink, think of them as actual sugar you’re swallowing.
That should scare the living daylights out of you!
8. Make a Bet
Can’t stop thinking about a new pair of shoes or purse, even though you have plenty of them?
Make a bet with your mum, sister or BFF: tell them you’re going to give them, say, $100 if you buy another in the next 6 months.
6 months should be enough to break the lifelong habit of buying into the latest fashion you can live without!
9. Know What You Pay For (and Scale Down)
From Shampoo to a luxury wedding ring, what we really pay for is brand.
Most competing items are manufactured in the same factory with a different label attached to them.
Financially savvy us would know a cheaper store-brand item does what it says on the tin, as any other premium brand does.
Re-examine everything you buy and have fun finding a cheaper version of a premium brand.
Vanity, pride, showing off or trying to fit in are useless things and bad for our bank balance and our soul.
10. Be Grateful for Living in the Best Time to Be Alive
No matter how miserable we may feel, it’s worthwhile to remind us we’re living in a far better world than our ancestors did.
They had lived with far less and suffered a great deal of hardship.
We too can live with far less than we’re used to by adopting a simpler life.
And there’s a bonus in doing so.
We become fearless while living well below our means.
11. Remember Your Financial Goals
Remind yourself of your goals: where you’re now and where you want to be in one year, five years or ten years.
Focusing on your goals curves your desire to spend, especially if your financial goal includes becoming debt-free.
12. Do Money Challenges Frequently
Money challenges are a great way to reset our financial habits.
13. Waste Nothing
It wasn’t that long ago that our ancestors had to crawl long dark tunnels just to get to work.
They suffered from life long hard labour and afterwards poor health from it.
I gave up reading George Orwell’s The Road to Wigan Pier because I found the hard life of working-class depicted was too depressing.
Even today, despite living in the best time to be alive in history, there’re people who live on less than $2 a day.
Take nothing for granted. Waste nothing.
Use up everything in your pantry. Don’t leave food wasted in the refrigerator. Switch off lights when you leave the room. Turn off the TV. Don’t leave taps running. Eat everything you cook. Or cook only as much as you want to eat.
14. Things are Just Things
As Ricky Gervais eloquently put:
We’re all gonna die soon. And there’s no sequel!
We’re way too hung up on things and let them define who we really are.
15. Learn to Love and Respect Money
When we love and respect money (not worship!), money rewards us just as much, so we must learn to protect it, not squander it.
When we misuse money, the money will misuse us.
16. Stop Excuses to Spend Money
There was a time I told myself I’d run more if I had a treadmill. Or I’d exercise more if I could join the gym.
Now I know they were excuses.
We can exercise without expensive pieces of equipment or personal trainers.
Review your spending and see if you’re justifying your spending.
17. Read All Reviews Before Buying
One study shows when you buy cheap items from the supermarket, you less likely regret buying them than expensive items you spent ages thinking through.
So, why don’t we use more time researching, finding out everything we need to know before buying?
After extensive research, you might find reasons not to buy.
Or you might end up making the most economic choice, hence not going over your budget.
18. If It Ain’t Broke…
All my gadgets are, by today’s standards, ancient old.
Since I started my debt-free journey, I’m happy as Larry, as long as they work.
If you can take a call from your mobile phone, read a book on your kindle or work on your laptop, you don’t need the latest model everyone raves about.
And you do you, stick to the budget.
19. Always Look For Ways to Increase Saving
Whether it’s by reducing expenses or increasing income from promotion or side hustle, looking for ways to increase saving changes our money attitude.
By actively looking for ways to increase saving, our mindset shifts from spending to saving.
We become natural at sticking to the budget.
20. Learn to Pay Yourself First
If you’re serious about being financially independent, I highly recommend you read this book.
It’s short and engaging.
Most of all, the advice is so simple that anyone can start budgeting and saving immediately.
Read my book review here and learn to pay yourself first before you pay for anything else: food, bills or debt.
Look after you and your future, first and foremost.
21. Buy Frozen Vegetables
Vegetables are packed and frozen when fresh.
Frozen vegetables are cheap and healthy and save you time cooking, preparing food (no more washing and chopping!) and, most importantly, last long.
No need to worry about fresh vegetables going off quickly, which means you can stretch your budget.
22. How Much Sweat for One Purchase
Work out your hourly rate from salary.
Every time you want to buy something, think about how many hours you’ll have to work to earn that money.
Spending is so easy and quick.
But when we think about sweat and effort we put in to earn money and make that one purchase, it makes us think twice about spending money, hence more conscious about sticking to the budget.
23. Do Digital Clean UP
Based on our browser history and past purchases, companies send out tempting offers all the time.
They know how to entice us.
These alluring emails are a minefield to our wallet.
Clean up: unsubscribe from the newsletter and remove credit card details from online shops.
Create a budget-friendly environment for you and your wallet.
24. Avoid Shopping in the Evening
Various surveys have shown most consumers spend time online shopping in the evening.
People on diet know eating in the evening ruins the chance of losing weight, so they stop eating after certain time.
If you are like most people who shop in the evening, distract yourself and stop shopping in the evening.
Evening meals wreak havoc on the diet, as does evening shopping in your wallet.
25. Borrow Books
I used to read eBooks exclusively and extensively from Kindle Unlimited.
If you read more than two books a month, Amazon’s Kindle Unlimited is a must-have.
You’ll save tons of money.
If you haven’t warmed up to eBooks, you’re missing out. Read my posts about the advantages of eBooks.
It’ll convert you to an eBook lover.
Nowadays, I borrow most books from the library. There’s an excellent app called Libby. It’s free and you can borrow many eBooks.
Or if you’re short on time and don’t want to miss out on nuggets of wisdom, sign up for Blinkist’s 7-Day FREE Trial.
7 million people are enjoying a book summary.
Use budgeting tips outlined in this post to cross check the healthy money habits you’re building.
Each budgeting tip will help you live below your means and stick to your budget.
Begin with one or two bad money habits you want to fix. The effect will spill over to other areas positively.
Do it like your life depends on it with intensity and purpose.
Before you know it, you’ll find yourself well on your way to a financially independent life.
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