"A big misconception is that you have to be motivated to get rolling. You don't.
Motivation often FOLLOWS action, not the other way around. In practice:
You don't need to feel good to get going; you need to get yourself going to give yourself a chance at feeling good."
- @BStulberg on Twitter
And who has the power to get yourself going? Only you! When you focus on what you do have control over, you can enthusiastically take the action/s necessary to feel good about yourself.
"Feeling good" looks different on everyone (and what a boring world it would be if it didn't!), and what this means to you should be defined in your own terms, and no one else's. Many of us know exactly how this would look for ourselves, yet we lack that jolt of inspiration it often takes to make it happen.
Getting Going...
What if we don't have to be motivated to start? Why don't we just start, and let the motivation follow? - just as researchers have told us it will!
One of the easiest places to kick off from when it comes to financial goals is to start with the dreaded 'B word' - a BUDGET.
Too many people are scared of this word and what it entails, yet it is really such a simple process, and so rewarding once you have one in place! Clearly laying out your finances allows you to consider where your money is going, and decide where it should be going. This gives YOU complete governance and control over your finances, empowering you while you navigate the process of budgeting. Ask yourself: what can a budget do for me?
Indeed, independently planning and drawing up a budget may be the very source of motivation that we are so reliant on for action!
How do I Budget?
The simplest tried and tested method for household budgeting is to use the 50/30/20 rule:
50% of your income is used for necessities,
30% is left to use for your wants and luxuries, and
20% goes into savings accounts and debt repayments.
What's great about this method is that Excel Spreadsheets already has a 'Personal Budget' template that calculates your total income, expenses, and savings. For those of us with a little bit of spreadsheet phobia, we've made a printable budget that you can fill in yourself - but the calculations will be up to you!
The first thing you should do after calculating your total income is to take the 20% dedicated to savings and split this among your savings accounts and/or debt settlements. After this, you can input your expenses, which the spreadsheet calculates in comparison to your income, allowing you to see how much more (or less) you are spending on necessities than you should be. From there you can make adjustments where possible, trying to get your expenses and income as close to 50/50 as possible (remember - half your income is for necessities!). With everything else paid, the balance remaining (also calculated on the spreadsheet) is then your spending money for the month! This can be portioned out for the remainder of the month using your calendar to schedule in and budget for any events or occasions you may be attending. And voila - In just 9 sentences (and using our Budgeting Spreadsheet if you would like to), you've learnt how to budget!
Ready & Rolling...
Once you're on track with your budget, it can be very easy to slip into a "Done!" attitude, instead of a "doing" one. A budget is a constant work in progress - you should be checking in on your finances weekly and ensuring that you are sticking to your plan, cutting back where you need to and recreating your budget every month - no month looks the same, and specifics add up!
This is where discipline comes in - of course you will slip up from time to time, who doesn't? What matters is if and how you get yourself back up and running again.
If you don't, you are likely to forget about your budget or savings plan just as quickly as you created it, and if you are too hard on yourself, you are just as likely to give up the entire process.
Allowing yourself room for mistakes, and making adjustments to perfect your process as you go is the only way you will really learn to be and feel fully in control of your finances and spending habits.
To summarise, we like to think of our process as the ACD of Budgeting (the missing B!):
A = Accountability, C = Control and D = Discipline.
We will leave you with a few tips that we hope will help you hold yourself accountable, to remind yourself what you can and cannot control, and to keep you disciplined on your budgeting journey:
Set Goals
Once you have your budget down, you can calculate how much you will be saving and set short-term, medium-term and long-term goals regarding the plans you have for your savings. For example, you may set a long-term goal to have enough money in your retirement savings to retire comfortably. When you contribute to your retirement savings each month, you get closer to reaching that goal. Reviewing the annual account growth will give you physical confirmation of your efforts, and will motivate you to continue putting money aside towards that goal.
Goals can also be set out as 'landmarks' that are set to celebrate once you have reached a certain amount in savings, or managed to get more out of your salary by budgeting. The rewards for these landmarks should be predetermined and should also be budgeted for if costly.
Set Dates
Any essential expenses that can be set up as a debit order, should be. This way, you have no option of backing out of or delaying the payments. Debit orders should be set for the same specific date shortly after you have been paid, so that these expense are accounted for early on in the month.
The same can be done for shopping days. Set 1-4 dates a month for shopping, and allow yourself no exceptions. You should always take a list of essentials that you stick to in the shop, buying only the items necessary for the month. A separate budget can even be drawn up for essential household items and groceries, and your spending can be drastically decreased in this way too (but that's a blog for another day!)
Set a System
Many people struggle with budgeting, especially within the first few months of doing so. If you find yourself overspending in certain areas, there is a simple way that is widely used to limit one's spending - the envelope method. Using this method, you will draw out the cash amount for what you have budgeted for a specific area, and keep this in an envelope. Dealing with cash, however, is not always the safest, and in this case one can open an alternate account with a separate card for this only (eg. A card that is used solely for grocery shopping or filling up on petrol). Banking apps and internet banking have made it very easy and accessible to transfer money between personal accounts, and you can add your budgeted amount to that card every time you receive your income - an electronic envelope!
This is all of the money that you have to spend in that area for the month!
Once there is no more cash, there is no more spending.
However, if overspending is an issue that presides, it may be more suitable to re-look at your budget and designate more money towards areas that you seem to run out of faster, making sacrifices in less pressing areas.
If you are interested in learning more about making/keeping yourself motivated or budgeting, Finpas is introducing a newly refined Goal-Setting Course to its clients - old and new. This is a 4 week course designed and run by Erynn (BA Psychology & English), that takes up 20 minutes a day, and will have its first run from 1 August 2022.
The pdf below is available with more details for your information, and you can book your spot by emailing Erynn at erynn@finpas.co.za or calling (031)572-3456.
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