Keeping your finances in order requires discipline. However, learning to count incoming revenue and outgoing expenses is critical for your long-term financial control.
So, what does accounting do for your budget? Like any business, there needs to be ledger entries to keep an eye on where money is being spent. Bills have to be paid, as costs of living need to be made. Everything costs money, so paying attention to what is coming in and what is going out makes total sense, right?
One good idea is to try and put a part of your income into savings. Month by month this will amass. A good friend of mine said what is the point of working hard and then at the end of the month you’ve already over spent your budget from the previous month. You know what I’m talking about, feeling free on occasions and not worrying about debt, just spending to your hearts content. We’ve all done it!
There are things you really don’t need. As an example, a regular size cappuccino at Starbucks is just under £4.00. Yes, it is very nice. Imagine having one from Monday till Friday every week. Imagine adding biscotti, an Italian, ‘twice baked’ hard and sweet nutty biscuits, perfect for dunking in coffee. A couple of those in a closed pack will set you back £2.05 in the United Kingdom. One key then is to reduce overheads!
Cappuccino and biscotti at £6.00 a day would be £30.00 a week. Now this is just one example. There are many more little pleasures you might take for granted. Maybe you are a smoker, or chewing gum chewer. Perhaps you buy daily newspapers and magazines. Whatever tickles your fancy may be difficult to cut from your daily habits. But what if you bought an occasional newspaper or magazine, or searched online for totally free articles of news and events which would be easy enough to find? You would economize!
However, let’s say you have a £10.00 spending miscellaneous budget a day for spending on whatever you like, that equates to around £3,650.00 a year. £15.00 a day would bring you up to £5,475.00 a year. Those sums mount up over time. In ten years, you’d have enough savings to afford the holiday of a lifetime, or downpayment on a new property. Or even start you own enterprise!
It might seem small now, but later down the road you will feel great when you finally realize spending should be for absolutely essential bills and necessary items. Even businesspeople who run their own or joint venture businesses need to put finances to the side to fuel growth whilst avoiding hurdles that are encountered along the way.
The moral here is that this saving character trait provides security and the confidence later in life to overcome burdens when the going gets tough. Trust me on this. Stop overspending! Saving is the real key to becoming rich.
Take care!
Prof. Carl Boniface
Vocabulary builder:
Budget (adj) = cheap, economical, reasonable, low-priced, modest, (ant) expensive. (n) = financial plan, financial statement, finances. (v) = “John budgeted his finances to afford a new home.” (syn) planed, accounted, cost, costed, make financial arrangements, make provisions
Amass (v) = accumulate, collect, stockpile, hoard, accrue, gather, build up, gather together, pile up, store up
Take for granted (idiom) = It means to fail to appreciate something or someone, or to assume they will always be available or stay the same. (Syn) assume, suppose, presume, presuppose, think, guess, imagine, believe, undervalue, accept
Tickles your fancy (idiom) = is an informal idiom that means to interest or attract someone. For example, you might ask someone if anything on the menu tickles their fancy.
Miscellaneous (adj) = various, varied, assorted, mixed, diverse, jumbled, (ant) homogenous
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