Budgeting is essentially planning. Like every plan, it is open to all the things that probably make a weight-loss plan fall in water. So, before we set about this quick look at budgeting, let’s establish this one fact- Budgets, like all plans, do not work unless you work them.
1. TARGET
This is the fundamental thing for anything we do, whether we are conscious of it or not. The MOTIVE, the REASON, the WHY and for WHAT. You must know why you are snapping out of “free living” to the budgeted life in the first place, and establish what you want from it. You must be as honest with yourself enough to know when it’s just peer-pressure. But more seriously, the reason for which you are budgeting should be clearly identified and must be as personal as possible, in the sense that, you do it because you have decided to do it, and not because it is a mere instruction that you are following. Desire drives success, keep that in mind. No personal desire, no personal success.
2. TRACK
Track your expenditure for a set period of time. You can do this for a month, spending like you ordinarily do, but this time, keeping tabs on every money that leaves your purse; even the alms you give! You can easily do this on your mobile phone, which presumably, is mobile so it goes everywhere with you. Do this religiously and you are 50% through the art of budgeting. This is important because it helps you know the nature of your expenditure in reality, which means that the information you gather would feed into an honest and realistic Budget. Another important aspect of tracking is to break the period into smaller chunks. As you track the month, keep tabs for each day separately, then for each week separately. This is so that you can prepare a daily and weekly budget, which arguably is the most effective way to staying within a monthly budget.
3. TICK AND TALLY
Create categories for the identified expenditure for the period under observation. One fun way to do this is to create a checkbox as you analyze each expenditure to find where it belongs and tick and tally. This tick and tally technique allows you to see how many times you make an expenditure under a category, and also, to know how many of your expenditures lies within a certain category. Typically, most people would have Food and miscellaneous and any other thing in between. One beautiful thing about drawing up the categorization is that it reveals a little bit about the kind of person that you are. If you are a mom, then you would probably have some categories that contain what you would spend buying diapers etc. If you are a reader, you would and should have a category to take care of your “Book-A-Week” Project. I have learnt that it is easier to work within categories that you create, that suit your everyday life.
4. TRIM
The major principle in budgeting is the efficient use of resources (money). Avoiding waste and loss is the catch here. Whatever the target is for your budgeting, you must as a matter of necessity, find ways to meet your needs without spending frivolously. Here, the tick and tally technique comes in handy because it allows you to see which items you can save on by reducing recurrent spending to a bulk purchase. For me, I realized that buying mobile talk-time in bulk was more cost effective than buying in “tots”. The initial cost is high, but by the end of the month, I find that I have spent only half of what I previously used to spend on talk time per month. Also, plan all expenditure that will require some form of travel and make your purchases once or twice during the period. You save time and money.
5. TRACE
Trace your progress.
Check to see if you are getting close to meeting your target for the period and also to know if you are spending within your budget. This is a very important aspect of budgeting. Measuring your progress enables you to assess a success or failure and mitigate its effects before they become uncontrollable, or worse, before your spill back into “free living”.
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